i

THE
LABOR CODE OF THE PHILIPPINES
ANNOTATED
Volume I
LABOR STANDARDS
AND
SOCIAL LEGISLATION
[Articles 1 to 210, Labor Code]

By

JOSELITO GUIANAN CHAN

Practising Lawyer, Professor of Law and Bar Reviewer

Second Edition, 2009

Revised and Enlarged

ii

Philippine Copyright
1997 and 2009
By
JOSELITO GUIANAN CHAN
Second Edition, 2009
Revised and Enlarged

All Rights Reserved

No portion of this book may be copied or reproduced in books, pamphlets, outlines
or notes, whether printed, machine-copied, mimeographed, typewritten, or in any other
form, for distribution or sale, without the written permission of the author. Any copy of this
book without the corresponding number and genuine signature of the author or his
representative on this page, either proceeds from an illegitimate source or is in possession of
one who has no authority to dispose thereof.

_______________________
Authorized Signature
Serial No. ____________

ISBN 978-971-94365-1-5
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iii

Republic of the Philippines

SENATE
Manila
BLAS F. OPLE
Senator

FOREWORD
Since the labor laws of the country were codified in the Seventies during my incumbency as Labor Secretary, the
Labor Code has undergone a series of revisions both by acts of the legislature and by executive fiat. Taken with
the numerous labor and social legislations bearing upon the field of labor and employment as well as the myriad
rules implementing the Labor Code and related laws, the subject could be utterly confusing and rather
complicated.
Through the years, it has been noted that only very few annotations and commentaries have been written on the
Labor Code. This is unfortunate considering its significance and impact on the lives of millions comprising the
backbone of our nation. This book by Atty. Joselito Guianan Chan is certainly a welcome addition to the sparse
bibliography on the Labor Code.
Like a master craftsman, Atty. Chan has carefully sifted through the maze of existing and old laws, rules and
regulations and other executive issuances and jurisprudential precepts, to separate the grain from the chaff, so
to speak, to bring us to the crux of things. He has intricately woven all these materials into a smooth-flowing and
compelling discussion of the current status of the law and its intricacies, correlated with all relevant topics.
In treating the more difficult or doubtful questions of the law, he provides us with incisive analysis and in-depth
discussion of the legal issues at hand, with appropriate reference to the leading and latest judicial precedents,
supplemented with a glimpse of the legislative history of the provisions under consideration, whenever
necessary.
The long years of legal practice and experience of Atty. Chan, both in the courtroom as an advocate of the law,
and in the classroom as professor of law, not to mention his able stewardship of his law firm and skillful
advocacy of his clients causes, have no doubt contributed in the formation and crystallization of this
authoritative and comprehensive work.
Indeed, no law library would be complete without a copy of this masterpiece. Students and practitioners will
surely find this book invaluable.
Senate of the Philippines, Manila, 14 August 1996.

(Sgd.) BLAS F. OPLE

2nd Floor, Marbella Manila Bldg., 2071, Roxas Blvd., Manila
Tel. 536-0259

iv

PREFACE

Second Revised Edition, 2009

The first edition of this first volume of my 2-volume series on the Labor Code was
first published in 1997 or about 12 years ago. Its Volume II has already been revised 4
times, the latest of which was issued early this year. Most recent significant
amendatory laws passed by Congress, recent issuances of labor authorities and new
pronouncements of the Supreme Court made the revision of this book imperative and
compelling indeed.
This latest edition is dedicated to the memory of the late Blas F. Ople, the Father of the
Labor Code, the longest-serving Minister of Labor and Employment (19 years), the first
Filipino to be elected President of the International Labor Organization (ILO) at its
60th General Assembly for which he was awarded a Gold Medal of Appreciation, a
distinguished member of the Constitutional Commission which drafted the 1987
Constitution, President of the Philippine Senate (1999-2000) and incumbent Secretary
of the Department of Foreign Affairs at the time of his demise in 2003. Ka Blas
graciously wrote the Foreword to this 2-volme series in 1996. I cannot repay the
precious time he gave up to go over the manuscript of its first edition. Indeed, I am
bound in lasting gratitude.
Joselito Guianan Chan
Chan Robles Law Firm
Philippine Stock Exchange Centre
Exchange Road
Ortigas Center
Pasig City
Metro Manila
June 15, 2009

TABLE OF CONTENTS
THE LABOR CODE OF THE PHILIPPINES
PRESIDENTIAL DECREE NO. 442, AS AMENDED
A DECREE INSTITUTING A LABOR CODE THEREBY REVISING AND CONSOLIDATING LABOR AND SOCIAL LAWS TO
AFFORD PROTECTION TO LABOR, PROMOTE EMPLOYMENT AND HUMAN RESOURCES DEVELOPMENT AND INSURE
INDUSTRIAL PEACE BASED ON SOCIAL JUSTICE
PRELIMINARY TITLE
Chapter I.....1
GENERAL PROVISIONS....1
Article 1. Name of Decree.1
NOTES AND COMMENTS:
1. CODIFICATION OF LABOR LAWS1; 2. GENERAL STRUCTURE OF THE LABOR CODE3; 3. LABOR
LAWS PRIOR TO THE ADVENT OF THE LABOR CODE5; 4. LAWS AMENDING THE LABOR CODE7; 5.
OTHER LABOR-RELATED LAWS AND SOCIAL LEGISLATIONS12; 6. RELEVANT CIVIL CODE
PROVISIONS16; 7. RELEVANT REVISED PENAL CODE PROVISIONS17; 8. SUPPLETORY
APPLICATION OF THE REVISED RULES OF COURT IN LABOR PROCEEDINGS19; 9. CHANGE IN
NAMES AND REFERENCES19.
Article 2. Date of Effectivity...20
NOTES AND COMMENTS:
1. DATE OF EFFECTIVITY OF THE LABOR CODE20.
Article 3. Declaration of Basic Policy20
NOTES AND COMMENTS:
1. CONSTITUTIONAL BASES20; 2. LEGAL MANDATE UNDER ARTICLE 323; 3. POLICE POWER OF
THE STATE24.
Article 4. Construction in Favor of Labor.....24
NOTES AND COMMENTS:
1. PROPER CONSTRUCTION AND INTERPRETATION24; 2. DOUBT OR AMBIGUITY IN LABOR
CONTRACTS26; 3. DOUBT OR AMBIGUITY IN EVIDENCE26; 4. WHEN RULE IN ARTICLE 4 DOES NOT
APPLY27.
Article 5. Rules and Regulations... 28
NOTES AND COMMENTS:
1. AGENCIES EMPOWERED TO PROMULGATE RULES28; 2. RULES TO IMPLEMENT THE LABOR
CODE28; 3. DATE OF EFFECTIVITY OF THE RULES TO IMPLEMENT THE LABOR CODE28; 4.
NATURE OF AND LIMITATION ON THE RULE-MAKING POWER28; 5. PUBLICATION OF THE
IMPLEMENTING RULES AND REGULATIONS30; 6. CONSEQUENCE OF DECLARATION OF NULLITY OF
A LAW OR ITS IMPLEMENTING RULES32.
Article 6. Applicability....33
NOTES AND COMMENTS:
1. APPLICABILITY OF THE LABOR CODE33; 2. EXCEPTED WORKERS33; 3. APPLICABILITY OF
TITLE II OF BOOK IV OF THE LABOR CODE TO GOVERNMENT EMPLOYEES34; 4. APPLICABILITY OF
THE LABOR CODE TO EMPLOYEES OF GOVERNMENT-OWNED AND/OR CONTROLLED
CORPORATIONS34; 5. EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP35; 6. CASES WHERE
EMPLOYMENT RELATIONSHIP EXISTS47; 7. CASES WHERE EMPLOYMENT RELATIONSHIP DOES
NOT EXIST50; 8. CASES WHERE THE LABOR CODE CONSIDERS THE EMPLOYMENT RELATIONSHIP
SUSPENDED50; 9.
CIRCUMSTANCES WHICH DO NOT AFFECT THE EMPLOYMENT
RELATIONSHIP51; 10. TERMINATION OF THE EMPLOYMENT RELATIONSHIP52; 11. CASE WHERE
THE LAW ITSELF DOES NOT CREATE THE EMPLOYMENT RELATIONSHIP54; 12. EXISTENCE OF
EMPLOYMENT RELATIONSHIP, BOTH A QUESTION OF FACT AND LAW55; 13. QUANTUM OF
EVIDENCE REQUIRED TO PROVE EMPLOYMENT RELATIONSHIP55.
Chapter II.58
EMANCIPATION OF TENANTS.58
Article 7. Statement of Objectives.......58
Article 8. Transfer of Lands to Tenant-Workers...58
Article 9. Determination of Land Value....58
Article 10. Conditions of Ownership.........58
Article 11. Implementing Agency...58
NOTES AND COMMENTS:
1. CONSTITUTIONAL BASIS59; 2. HISTORICAL PERSPECTIVE59; 3. THE COMPREHENSIVE
AGRARIAN REFORM LAW OF 198861.
BOOK ONE
PRE-EMPLOYMENT
Article 12. Statement of Objectives.....63
NOTES AND COMMENTS:
1. MANPOWER TRAINING, ALLOCATION AND UTILIZATION63; 2. REGULATING LOCAL AND
OVERSEAS EMPLOYMENT63; 3. REGULATING THE EMPLOYMENT OF ALIENS64.
Title I.......65
RECRUITMENT AND PLACEMENT OF WORKERS....65

vi

Chapter I.....65
GENERAL PROVISIONS.......65
Article 13. Definitions......65
NOTES AND COMMENTS:
1. DEFINITIONS ACCORDING TO THE LABOR CODE, R.A. NO. 8042 AND POEA RULES65; 2. DEFINITION
OF THE TERM WORKER.66; 3. RECRUITMENT AND PLACEMENT OF WORKERS68; 4. PRIVATE
EMPLOYMENT AGENCY68; 5. PRIVATE RECRUITMENT ENTITY69; 6. LICENSE OR AUTHORITY69;
7. DISTINCTION BETWEEN A PRIVATE EMPLOYMENT AGENCY AND PRIVATE RECRUITMENT
ENTITY69; 8. OVERSEAS EMPLOYMENT69; 9. MIGRANT WORKERS AND OVERSEAS FILIPINO
WORKERS70; 10. DOCUMENTED AND UNDOCUMENTED MIGRANT WORKERS71; 11. SKILLED AND
UNDERAGED MIGRANT WORKERS71; 12. SEAMAN OR SEAFARER71; 13. EMIGRANT72.
Article 14. Employment Promotion....72
NOTES AND COMMENTS:
1. POWER OF THE SECRETARY OF LABOR AND EMPLOYMENT72; 2. FREE PLACEMENT SERVICES BY
PUBLIC EMPLOYMENT OFFICES FOR DOMESTIC AND OVERSEAS WORK72; 3. PLACEMENT OF
WORKERS72; 4. VOCATIONAL GUIDANCE AND TESTING73; 5. OCCUPATIONAL CLASSIFICATION
OF REGISTERED APPLICANTS73; 6. OCCUPATIONAL-INDUSTRIAL MOBILITY OF WORKERS73; 7.
GEOGRAPHICAL MOVEMENT OF WORKERS73; 8. JOB CLEARANCE AND INFORMATION
SYSTEM73; 9. SUBMISSION OF REPORTS73.
Article 15. Bureau of Employment Services......73
NOTES AND COMMENTS:
1. BUREAU OF LOCAL EMPLOYMENT (BLE)74; 2. FUNCTIONS OF THE BLE74; 3. DECENTRALIZED
FUNCTIONS75.
Article 16. Private Recruitment.......75
NOTES AND COMMENTS:
1. PUBLIC EMPLOYMENT OFFICES75; 2. PUBLIC EMPLOYMENT SERVICE OFFICE ACT OF 1999 (R.A.
NO. 8759)76; 3. JOBS FAIR79.
Article 17. Overseas Employment Development Board....79
NOTES AND COMMENTS:
1. REPEAL OF ARTICLE 17 BY EXECUTIVE ORDER NO. 79779; 2. POWERS AND FUNCTIONS OF THE
POEA80; 3. PROVISION ON DEREGULATION AND PHASE-OUT OF THE RECRUITMENT AND
REGULATORY FUNCTIONS OF THE POEA REPEALED BY R.A. NO. 9422 [APRIL 10, 2007]81; 4.
DECENTRALIZATION OF SOME POEA SERVICES81; 5. VALIDITY OF THE RULES AND REGULATIONS
ISSUED BY THE POEA82; 6. NATIONALITY OF EMPLOYER NOT MATERIAL83; 7. RULES
GOVERNING THE RECRUITMENT AND PLACEMENT FOR OVERSEAS EMPLOYMENT BY THE POEA83;
8. STATEMENT OF POLICY...83; 9. RECRUITMENT, HIRING AND PLACEMENT BY AND THROUGH THE
POEA84; 10. WELFARE SERVICES OF POEA FOR LAND-BASED OVERSEAS WORKERS85; 11.
ASSISTANCE OF POEA TO SEAFARERS85; 12. CONCILIATION BY POEA OF COMPLAINTS INVOLVING
LAND-BASED OVERSEAS WORKERS86; 13. REPATRIATION OF LAND-BASED OVERSEAS WORKERS
AND SEAFARERS86; 14. WAR-RISK AREAS AND INSURANCE OF LAND-BASED OVERSEAS WORKERS
AND SEAFARERS88; 15. EDUCATION PROGRAM APPLICABLE TO THE RECRUITMENT AND
DEPLOYMENT OF LAND-BASED OVERSEAS WORKERS AND SEAFARERS88; 16. MANPOWER
REGISTRATION OF LAND-BASED OVERSEAS WORKERS90; 17. MANPOWER RESEARCH AND
DEVELOPMENT FOR LAND-BASED OVERSEAS WORKERS AND SEAFARERS90; 18. REPRESENTATION
IN CONGRESS91; 19. PARTICIPATION OF OFWs IN OVERSEAS ABSENTEE VOTING91; 20. MIGRANT
WORKERS DAY92; 21. TRANSFER OF WELFARE SERVICES TO OWWA (APPLICABLE TO BOTH LANDBASED OVERSEAS WORKERS AND SEAFARERS)93; 22. GENERAL AND MISCELLANEOUS PROVISIONS
FOR LAND-BASED OVERSEAS WORKERS AND SEAFARERS93.
Article 18. Ban on Direct-Hiring....93
NOTES AND COMMENTS:
1. BAN ON DIRECT-HIRING93; 2. RATIONALE FOR THE BAN93; 3. SUABILITY OF FOREIGN
CORPORATIONS DIRECTLY HIRING FILIPINO WORKERS94.
Article 19. Office of Emigrant Affairs...94
NOTES AND COMMENTS:
1. ABOLITION OF OFFICE OF EMIGRANT AFFAIRS95; 2. COMMISSION ON FILIPINOS OVERSEAS
(CFO)95; 3. POWERS AND FUNCTIONS OF THE CFO95; 4. OTHER RELEVANT PROVISIONS OF BATAS
PAMBANSA BILANG 7996.
Article 20. National Seamen Board....96
NOTES AND COMMENTS:
1. REPEAL OF PARAGRAPH [A] OF ARTICLE 2097; 2. REPEAL OF PARAGRAPH [B] BY REPUBLIC ACT
NO. 804299; 3. JURISDICTION OVER MONEY CLAIMS CASES OF OFWs99; 4. NLRC PROCEDURAL
RULES UNDER THE NEW LAW100; 5. EMPLOYER-EMPLOYEE RELATIONS CASES WHERE
VIOLATIONS OF RECRUITMENT REGULATIONS ARE ALLEGED AND/OR UNCOVERED102; 6. NATURE
OF EMPLOYMENT OF OVERSEAS FILIPINO WORKERS102; 7. TERMINATION OF EMPLOYMENT OF
OFWs105; 8. CLAIMS OF OFWs FOR DISABILITY, DEATH AND OTHER BENEFITS112; 9. AWARD IN
FOREIGN CURRENCY, HOW COMPUTED123; 10. BURDEN OF PROOF IN TERMINATION CASES
INVOLVING OFWs124; 11. QUANTUM OF EVIDENCE125; 12. JOINT AND SOLIDARY LIABILITY OF
LOCAL AGENCY AND ITS PRINCIPAL126.
Article 21. Foreign Service Role and Participation....130

vii

NOTES AND COMMENTS:

1. PROTECTION OF MIGRANT WORKERS AND OVERSEAS FILIPINOS131; 2. RIGHTS AND
ENFORCEMENT MECHANISM UNDER INTERNATIONAL AND REGIONAL HUMAN RIGHTS
SYSTEMS136; 3. COUNTRY-TEAM APPROACH137; 4. INCENTIVES TO PROFESSIONALS AND OTHER
HIGHLY-SKILLED FILIPINOS ABROAD138; 5. TRAVEL ADVISORY AND INFORMATION
DISSEMINATION138; 6. FUNDS ESTABLISHED FOR MIGRANT WORKERS AND OVERSEAS FILIPINOS
UNDER REPUBLIC ACT NO. 8042138; 7. WELFARE FUND FOR OVERSEAS WORKERS141; 8.
PERFORMING ARTISTS PROVIDENT FUND142; 9. MANDATORY LIFE AND PERSONAL ACCIDENT
INSURANCE COVERAGE OF OFWs142; 10. MEDICAL CARE PROGRAM FOR OFWs AND
DEPENDENTS145; 11. TRANSFER OF MEDICARE FUNDS AND FUNCTIONS FROM OWWA TO PHIC145.
Article 22. Mandatory Remittance of Foreign Exchange Earnings.145
NOTES AND COMMENTS:
1. MANDATORY OBLIGATION TO REMIT FOREIGN EXCHANGE EARNINGS145; 2. GUIDELINES AND
MECHANISM TO FACILITATE REMITTANCES151; 3. LATEST FIGURES ON OFW REMITTANCES154;
4. OVERSEAS WORKERS INVESTMENT FUND155.
Article 23. Composition of the Boards.....160
NOTES AND COMMENTS:
1. AMENDMENT OF ARTICLE 23 BY EXECUTIVE ORDER NO. 247160; 2. STRUCTURAL ORGANIZATION
OF THE POEA161.
Article 24. Boards to Issue Rules and Collect Fees....161
NOTES AND COMMENTS:
1. RULE-MAKING POWER UNDER ARTICLE 24162; 2. POWER OF THE POEA TO IMPOSE AND
COLLECT FEES162.
Chapter II.....163
REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES..163
Article 25. Private Sector Participation in the Recruitment and Placement of Workers.....163
Article 26. Travel Agencies Prohibited to Recruit..163
Article 27. Citizenship Requirement163
Article 28. Capitalization.......163
Article 29. Non-Transferability of License or Authority163
Article 30. Registration Fees.....163
Article 31. Bonds....163
NOTES AND COMMENTS:
1. JOINT DISCUSSION OF ARTICLES 25 TO 31 OF THE LABOR CODE163; 2. RECRUITMENT AND
PLACEMENT FOR LOCAL OR OVERSEAS EMPLOYMENT164; 3. APPLICABLE RULES TO
RECRUITMENT AND PLACEMENT OF WORKERS164; 4. RECRUITMENT AND PLACEMENT FOR
LOCAL EMPLOYMENT165; 5. RECRUITMENT AND PLACEMENT FOR OVERSEAS EMPLOYMENT170.
Article 32. Fees to be Paid by Workers....199
NOTES AND COMMENTS:
1. FEES TO BE PAID FOR LOCAL EMPLOYMENT199; 2. FEES TO BE PAID FOR OVERSEAS
EMPLOYMENT200.
Article 33. Reports on Employment Status...............202
NOTES AND COMMENTS:
1. REPORTS REQUIRED202; 2. QUALIFYING STANDARD IN THE EXERCISE OF THE REGULATORY
POWER202; 3. CONSEQUENCE OF FAILURE TO COMPLY WITH REPORTORIAL REQUIREMENTS202.
Article 34. Prohibited Practices....202
NOTES AND COMMENTS:
1. ACTS OR PRACTICES PROHIBITED UNDER ARTICLE 34203; 2. APPLICABILITY OF ARTICLE 34 TO
LOCAL AND OVERSEAS EMPLOYMENT206; 3. PROHIBITED ACTS AND PRACITCES IN LOCAL
EMPLOYMENT...206; 4. PROHIBITED ACTS AND PRACTICES IN OVERSEAS EMPLOYMENT208.
Article 35. Suspension and/or Cancellation of License or Authority....208
NOTES AND COMMENTS:
1. RECRUITMENT VIOLATIONS AND RELATED CASES208; 2. GROUNDS FOR THE IMPOSITION OF
ADMINISTRATIVE SANCTIONS AGAINST FOREIGN PRINCIPALS OR EMPLOYERS UNDER THE 2002
POEA RULES GOVERNING THE RECRUITMENT AND PLACEMENT OF LAND-BASED OVERSEAS
WORKERS209; 3. GROUNDS FOR THE IMPOSITION OF ADMINISTRATIVE SANCTIONS AGAINST
FOREIGN PRINCIPALS OR EMPLOYERS UNDER THE 2003 POEA RULES AND REGULATIONS
GOVERNING THE RECRUITMENT AND EMPLOYMENT OF SEAFARERS211; 4. CLASSIFICATION OF
OFFENSES OF FOREIGN PRINCIPALS AND EMPLOYERS AND SCHEDULE OF PENALTIES IN
CONNECTION WITH THE RECRUITMENT AND PLACEMENT OF LAND-BASED OVERSEAS WORKERS
AND SEAFARERS212; 5. PROCEDURAL RULES APPLICABLE TO CASES COGNIZABLE BY THE
POEA219; 6. APPEAL OR PETITION FOR REVIEW FROM THE DECISIONS OF THE POEA IN
RECRUITMENT VIOLATION CASES AND OTHER RELATED CASES (APPLICABLE TO BOTH LAND-BASED
WORKERS AND SEAFARERS)223; 7. FACTUAL FINDINGS OF POEA, GIVEN FINALITY224; 8.
EXECUTION OF DECISIONS IN CASES FILED BY LAND-BASED OVERSEAS WORKERS AND
SEAFARERS225; 9. DISCIPLINARY ACTION CASES AGAINST FOREIGN PRINCIPALS OR EMPLOYERS
OF LAND-BASED WORKERS AND SEAFARERS227; 10. DISCIPLINARY ACTION CASES AGAINST
OFWs228; 11. APPEAL OR PETITION FOR REVIEW IN DISCIPLINARY ACTION CASES INVOLVING
LAND-BASED OVERSEAS WORKERS AND SEAFARERS236; 12. COMMON PROCEDURAL PROVISIONS

viii

UNDER THE POEA RULES APPLICABLE TO BOTH LAND-BASED OVERSEAS WORKERS AND
SEAFARERS237.
Chapter III...239
MISCELLANEOUS PROVISIONS.....239
Article 36. Regulatory Power....239
NOTES AND COMMENTS:
1. NATURE OF POWER239; 2. EXERCISE OF THE REGULATORY POWER239.
Article 37. Visitorial Power...239
NOTES AND COMMENTS:
1. VISITORIAL POWER UNDER ARTICLE 37240; 2. EFFECT OF OBSTRUCTION OF EXERCISE OF
VISITORIAL POWER240.
Article 38. Illegal Recruitment......240
NOTES AND COMMENTS:
1. APPLICATION OF ARTICLE 38 TO BOTH LOCAL AND OVERSEAS EMPLOYMENT241; 2. CONCEPT OF
ILLEGAL RECRUITMENT241; 3. ILLEGAL RECRUITMENT AS DEFINED IN VARIOUS LAWS AND
RULES241; 4. ELEMENTS OF SIMPLE ILLEGAL RECRUITMENT245; 5. ANY PERSON, WHETHER A
NON-LICENSEE, NON-HOLDER, LICENSEE OR HOLDER OF AUTHORITY MAY BE HELD LIABLE FOR
ILLEGAL RECRUITMENT253; 6. ILLEGAL RECRUITMENT, WHEN CONSIDERED ECONOMIC
SABOTAGE255; 7. A PERSON, FOR THE SAME ACTS, MAY BE CHARGED AND CONVICTED
SEPARATELY FOR THE CRIME OF ILLEGAL RECRUITMENT AND THE FELONY OF ESTAFA258; 8.
PERSONS CRIMINALLY LIABLE FOR ILLEGAL RECRUITMENT260; 9. ADMINISTRATIVE ACTION
AGAINST THE LICENSEE OR HOLDER OF AUTHORITY, SEPARATE AND DISTINCT FROM THE
CRIMINAL ACTION FOR ILLEGAL RECRUITMENT263; 10. GOVERNMENT OFFICIALS AND
EMPLOYEES ARE PROHIBITED TO PARTICIPATE IN THE RECRUITMENT OF OFWs263; 11. ANTIILLEGAL RECRUITMENT PROGRAMS263; 12. CLOSURE ORDER265; 13. POWER OF DOLE
SECRETARY TO ISSUE WARRANTS OF ARREST AND SEARCH AND SEIZURE267; 14. WARRANTLESS
ARREST AND SEARCHES AND SEIZURES269; 15. JUDICIAL RECOURSE IN THE FILING OF CRIMINAL
ACTION FOR ILLEGAL RECRUITMENT269; 16. PRESCRIPTIVE PERIOD OF ILLEGAL RECRUITMENT
CASES270.
Article 39. Penalties...271
NOTES AND COMMENTS:
1. PENALTIES IN GENERAL272; 2. PENALTIES IN CASE OF ILLEGAL RECRUITMENT CONSTITUTING
ECONOMIC SABOTAGE273; 3. PENALTY FOR VIOLATIONS COMMITTED BY LICENSEES OR HOLDERS
OF AUTHORITY273; 4. PENALTY FOR VIOLATIONS COMMITTED BY NON-LICENSEES OR NONHOLDERS OF AUTHORITY274; 5. CIRCUMSTANCES THAT JUSTIFY THE IMPOSITION OF THE
MAXIMUM PENALTY275; 6. APPLICATION OF THE INDETERMINATE SENTENCE LAW275; 7.
AWARD OF DAMAGES TO VICTIMS OF ILLEGAL RECRUITMENT276; 8. IMPOSITION OF LEGAL
INTEREST ON THE ACTUAL DAMAGES AWARDED IN ILLEGAL RECRUITMENT CASES277; 9.
PERSONS LIABLE FOR ILLEGAL RECRUITMENT IF COMMITTED BY JURIDICAL PERSONS277; 10.
EFFECT OF CONVICTION277; 11. NON-APPLICABILITY OF ARTICLE 288 OF THE LABOR CODE TO
ILLEGAL RECRUITMENT CASES277.
Title II...278
EMPLOYMENT OF NON-RESIDENT ALIENS......278
Article 40. Employment Permit of Non-Resident Aliens278
NOTES AND COMMENTS:
1. BASIC PRINCIPLES INVOLVED IN THE HIRING OF ALIEN WORKERS278; 2. REVISED RULES FOR
THE ISSUANCE OF EMPLOYMENT PERMITS TO FOREIGN NATIONALS279; 3. UNDERSTUDY
TRAINING PROGRAM (UTP) NO LONGER REQUIRED285; 4. SPECIAL VISA FOR EMPLOYMENT
GENERATION (SVEG) ISSUED TO NON-IMMIGRANTS285.
Article 41. Prohibition Against Transfer of Employment..287
NOTES AND COMMENTS:
1. PROHIBITION AND GROUNDS FOR CANCELLATION OF THE AEP287; 2. PENALTY FOR VIOLATION
OF TITLE II OF BOOK I287.
Article 42. Submission of List...287
NOTES AND COMMENTS:
1. REQUIRED SUBMISSION OF LIST UNDER ARTICLE 42287; 2. SUBMISSION OF LIST OF ALIENS
EMPLOYED288.
BOOK TWO
HUMAN RESOURCES DEVELOPMENT PROGRAM
Title I.....289
NATIONAL MANPOWER DEVELOPMENT PROGRAM.......289
Chapter I.......289
NATIONAL POLICIES AND ADMINISTRATIVE MACHINERY FOR THEIR IMPLEMENTATION289
NOTES AND COMMENTS:
1. INTRODUCTION289.
Article 43. Statement of Objective....289
NOTES AND COMMENTS:
1. DECLARATION OF POLICY UNDER THE TESDA ACT OF 1994 [R.A. NO. 7796]289; 2. STATEMENT OF
GOALS AND OBJECTIVES290.

ix

Article 44. Definitions........290

NOTES AND COMMENTS:
1. TERMS DEFINED UNDER THE RULES TO IMPLEMENT BOOK II OF THE LABOR CODE290; 2.
RELEVANT TERMS DEFINED UNDER THE TESDA ACT OF 1994292.
Article 45. National Manpower and Youth Council, Composition....294
NOTES AND COMMENTS:
1. TESDA REPLACED AND ABSORBED NMYC294; 2. CREATION OF TESDA294.
Article 46. National Manpower Plan...297
NOTES AND COMMENTS:
1. PROGRAMS AND ACTIVITIES IN TECHNICAL EDUCATION AND SKILLS DEVELOPMENT UNDER THE
TESDA ACT OF 1994297; 2. COMPREHENSIVE DEVELOPMENT PLAN FOR MIDDLE-LEVEL
MANPOWER298; 3. DEVOLUTION OF TESDAS TRAINING FUNCTIONS TO LOCAL GOVERNMENT
UNITS299.
Article 47. National Manpower Skills Center......299
NOTES AND COMMENTS:
1. TESDA SKILLS DEVELOPMENT CENTERS299; 2. TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT COMMITTEES299.
Article 48. Establishment and Formulation of Skills Standards...300
NOTES AND COMMENTS:
1. NATIONAL STANDARDS OF TRADE SKILLS UNDER ARTICLE 48 AND ITS IMPLEMENTING
RULES300; 2. ESTABLISHMENT AND ADMINISTRATION OF NATIONAL TRADE SKILLS STANDARDS
UNDER THE TESDA ACT OF 1994301; 3. SKILLS DEVELOPMENT OPPORTUNITIES301; 4. SKILLS
OLYMPICS301
Article 49. Administration of Training Programs...301
NOTES AND COMMENTS:
1. ADMINISTRATION OF TRAINING PROGRAMS UNDER THE TESDA ACT OF 1994302; 2. ASSISTANCE
TO EMPLOYERS AND ORGANIZATIONS302; 3. COORDINATION OF ALL SKILLS TRAINING
SCHEMES302; 4. TECHNICAL AND VOCATIONAL SCHOOLS AND TRAINING CENTERS302; 5. USERLED OR MARKET-DRIVEN STRATEGY303; 6. DUAL TRAINING SYSTEM ACT OF 1994303; 7. THE
TESDA DEVELOPMENT FUND308; 8. INSTRUCTIONAL IMPROVEMENT FUND309; 9. SCHOLARSHIP
GRANTS309; 10. POWER OF TESDA TO REVIEW AND RECOMMEND ACTIONS309.
Article 50. Industry Boards...309
NOTES AND COMMENTS:
1. INDUSTRY BOARDS UNDER ARTICLE 50 AND ITS IMPLEMENTING RULES309; 2. INDUSTRY BOARDS
UNDER THE TESDA ACT OF 1994310.
Article 51. Employment Service Training Functions.....310
NOTES AND COMMENTS:
1. EMPLOYMENT PROMOTION SCHEME310; 2. STUDIES AND RESEARCH310; 3. RESEARCH AND
CONTINUOUS ASSESSMENT AND STUDIES311; 4. EVALUATION311.
Article 52. Incentive Scheme.....311
NOTES AND COMMENTS:
1. INCENTIVE SCHEME UNDER ARTICLE 52 AND ITS IMPLEMENTING RULES311; 2. INCENTIVE
SCHEMES UNDER THE TESDA ACT OF 1994312; 3. LABOR TRAINING EXPENSES AS INCOME TAX
DEDUCTION312; 4. DEDUCTIBILITY OF LABOR TRAINING COSTS FOR APPRENTICES314.
Article 53. Council Secretariat......314
NOTES AND COMMENTS:
1. THE TESDA SECRETARIAT315; 2. THE DIRECTOR-GENERAL316; 3. THE DEPUTY DIRECTORSGENERAL316; 4. THE CHIEF OF SERVICES FOR ADMINISTRATION316; 5. STRUCTURAL
ORGANIZATION AND PERSONNEL316.
Article 54. Regional Manpower Development Offices....317
NOTES AND COMMENTS:
1. TESDA REGIONAL OFFICES UNDER THE TESDA ACT OF 1994317; 2. TESDA PROVINCIAL
OFFICES317.
Article 55. Consultants and Technical Assistance, Publication and Research318
NOTES AND COMMENTS:
1. CONSULTANTS AND TECHNICAL ASSISTANCE, PUBLICATION AND RESEARCH318.
Article 56. Rules and Regulations....318
NOTES AND COMMENTS:
1. RULE-MAKING POWER OF TESDA318; 2. REVIEW OF THE PERFORMANCE OF TESDA318.
Title II.......319
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS.....319
Chapter I...............319
APPRENTICES.......319
Article 57. Statement of Objectives...319
NOTES AND COMMENTS:
1. SPECIAL WORKERS319; 2. OBJECTIVES OF APPRENTICESHIP PROGRAMS319; 3. GOVERNING
LAWS320; 4. APPRENTICESHIP PROGRAM TO BE IMPLEMENTED AND ADMINISTERED BY
TESDA...320; 5. OFFICE OF APPRENTICESHIP CREATED UNDER THE TESDA ACT OF 1994320; 6.

REVISED GUIDELINES IN THE IMPLEMENTATION OF APPRENTICESHIP AND LEARNERSHIP

PROGRAMS320.
Article 58. Definition of Terms.....321
NOTES AND COMMENTS:
1. DEFINITIONS UNDER VARIOUS LAWS AND ISSUANCES321; 2. APPRENTICESHIP, DEFINED321; 3.
APPRENTICE, DEFINED321; 4. APPRENTICIABLE OCCUPATION, DEFINED322; 5. APPRENTICESHIP
AGREEMENT322.
Article 59. Qualifications of an Apprentice.....322
NOTES AND COMMENTS:
1. QUALIFICATIONS OF APPRENTICES322; 2. CONFLICT IN THE AGE REQUIREMENT323; 3.
VALIDITY OF THE IMPOSITION OF ADDITIONAL REQUIREMENT ON PHYSICAL FITNESS UNDER THE
IMPLEMENTING RULES323; 4. CERTIFICATE OF COMPLETION OF APPRENTICESHIP324; 5.
CERTIFICATE, EVIDENCE OF SKILLS324.
Article 60. Employment of Apprentices...324
NOTES AND COMMENTS:
1. WHO MAY ESTABLISH APPRENTICESHIP PROGRAMS324; 2. HIGHLY TECHNICAL
INDUSTRIES324; 3. APPRENTICEABLE TRADES AND OCCUPATIONS324; 4. NUMBER OF
APPRENTICES TO BE TAKEN IN BY COMPANIES325; 5. REGISTRATION OF APPRENTICESHIP
PROGRAM325; 6. REGISTRATION PROCESS FOR APPRENTICESHIP PROGRAMS INVOLVING
OCCUPATIONS ALREADY APPROVED AS APPRENTICIABLE325; 7. REGISTRATION PROCESS FOR
APPRENTICESHIP
PROGRAMS
INVOLVING
OCCUPATIONS
NOT
YET
APPROVED
AS
APPRENTICIABLE325; 8. APPROVAL OF APPRENTICIABLE OCCUPATIONS326; 9. POSTREGISTRATION CONCERNS326; 10. SANCTIONS327.
Article 61. Contents of Apprenticeship Agreements...327
NOTES AND COMMENTS:
1. REQUIRED CONTENTS OF APPRENTICESHIP AGREEMENTS327; 2. NO VALID APPRENTICESHIP
TRAINING IN THE ABSENCE OF AN APPRENTICESHIP AGREEMENT327; 3. TESDA APPROVAL OF
APPRENTICESHIP AGREEMENT, INDISPENSABLE FOR ITS VALIDITY328; 4. APPRENTICESHIP
PERIOD329; 5. OPTION TO EMPLOY APPRENTICE330; 6. RULE IN CASE OF PROBATIONARY
EMPLOYMENT WHERE THE JOB IS COVERED BY AN APPRENTICESHIP AGREEMENT330; 7. HOURS
OF WORK OF APPRENTICES330; 8. WAGE RATE OF APPRENTICES331; 9. MODEL APPRENTICESHIP
STANDARDS331.
Article 62. Signing of Apprenticeship Agreement...332
NOTES AND COMMENTS:
1. PARTIES REQUIRED TO SIGN THE APPRENTICESHIP AGREEMENT332; 2. COPIES OF AGREEMENT
TO BE FURNISHED TESDA332; 3. CREATION OF TRIPARTITE PLANT APPRENTICESHIP
COMMITTEE332; 4. NON-TRIPARTITE APPRENTICESHIP COMMITTEES333; 5. CREATION OF AN AD
HOC ADVISORY COMMITTEE333; 6. DUTIES OF APPRENTICESHIP COMMITTEES333; 7.
CERTIFICATE OF MERITORIOUS SERVICE ISSUED TO APPRENTICESHIP COMMITTEES333.
Article 63. Venue of Apprenticeship Programs...333
NOTES AND COMMENTS:
1. APPRENTICESHIP SCHEMES334; 2. USE OF TESDA TRAINING CENTERS334; 3. PRIORITY IN THE
USE OF TRAINING CENTERS334.
Article 64. Sponsoring of Apprenticeship Program334
NOTES AND COMMENTS:
1. HOW APPRENTICESHIP PROGRAM MAY BE UNDERTAKEN334; 2. VENUES OF ON-THE-JOB
TRAINING335; 3. EXPLICIT DESCRIPTION OF ON-THE-JOB TRAINING335.
Article 65. Investigation of Violation of Apprenticeship Agreement335
NOTES AND COMMENTS:
1. INITIATION OF INVESTIGATION FOR VIOLATION OF APPRENTICESHIP AGREEMENT335; 2. WHO
MAY TERMINATE THE APPRENTICESHIP AGREEMENT335; 3. VALID CAUSES FOR TERMINATION BY
EMPLOYER335; 4. VALID CAUSES FOR TERMINATION BY APPRENTICE336; 5. PROCEDURE IN THE
TERMINATION OF APPRENTICESHIP336.
Article 66. Appeal to the Secretary of Labor and Employment.336
Article 67. Exhaustion of Administrative Remedies...336
NOTES AND COMMENTS:
1. RATIONALE BEHIND THE DOCRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES336; 2.
ADMINISTRATIVE REMEDIES REFERRED TO IN ARTICLE 67337; 3. EXCEPTIONS TO THE RULE ON
EXHAUSTION OF ADMINISTRATIVE REMEDIES337; 4. JUDICIAL REVIEW OF DECISIONS OF THE
DOLE SECRETARY339.
Article 68. Aptitude Testing of Applicants...339
NOTES AND COMMENTS:
1. APTITUDE TESTS339; 2. COMPETENCY-BASED SYSTEM IN APPRENTICESHIP339.
Article 69. Responsibility for Theoretical Instruction....340
NOTES AND COMMENTS:
1. RELATED THEORETICAL INSTRUCTIONS, DEFINED340; 2. ON-THE-JOB TRAINING, DEFINED340;
3. THEORETICAL INSTRUCTIONS BY EMPLOYER340; 4. RATIO OF THEORETICAL INSTRUCTIONS
AND ON-THE-JOB TRAINING340; 5. PREVIOUS TRAINING OR EXPERIENCE, WHEN CREDITED340.
Article 70. Voluntary Organization of Apprenticeship Programs; Exemptions...341

xi

NOTES AND COMMENTS:

1. GENERAL RULE341; 2. EXCEPTIONS341.
Article 71. Deductibility of Training Costs......341
NOTES AND COMMENTS:
1. DEDUCTIBILITY OF COST OF TRAINING THE APPRENTICES; REQUISITES341; 2. CERTIFICATION
FROM DOLE342.
Article 72. Apprentices Without Compensation......342
NOTES AND COMMENTS:
1. APPRENTICES WITHOUT COMPENSATION341; 2. LEGAL APPRENTICESHIP OR INTERNSHIP342; 3.
PLACEMENT OF CADETS/APPRENTICES UNDER THE JOB CORPS PROGRAM343.
Chapter II.....344
LEARNERS.....344
Article 73. Learners, Defined....344
NOTES AND COMMENTS:
1. LEARNERSHIP, DEFINED344; 2. LEARNER, DEFINED344; 3. LEARNERSHIP AGREEMENT,
DEFINED344; 4. GOVERNING LAWS344; 5. LEARNABLE OCCUPATIONS344; 6. REGISTRATION OF
LEARNERSHIP PROGRAM344; 7. REGISTRATION PROCESS FOR LEARNERSHIP PROGRAMS
INVOLVING OCCUPATIONS ALREADY APPROVED AS LEARNABLE345; 8. REGISTRATION PROCESS
FOR LEARNERSHIP PROGRAMS INVOLVING OCCUPATIONS NOT YET APPROVED AS
LEARNABLE345; 9. APPROVAL OF LEARNABLE OCCUPATIONS346; 10. POST-REGISTRATION
CONCERNS346; 11. SANCTIONS346.
Article 74. When Learners May Be Hired...347
NOTES AND COMMENTS:
1. CIRCUMSTANCES THAT JUSTIFY THE HIRING OF LEARNERS347; 2. LEARNABLE TRADES347; 3.
COMPETENCY-BASED SYSTEM IN LEARNERSHIP PROGRAMS347; 4. MAXIMUM NUMBER OF
LEARNERS THAT COMPANIES MAY TAKE IN348.
Article 75. Learnership Agreement......348
NOTES AND COMMENTS:
1. CONTENTS OF LEARNERSHIP AGREEMENT348; 2. PARTIES TO A LEARNERSHIP AGREEMENT348;
3. NO VALID LEARNERSHIP IN THE ABSENCE OF A LEARNERSHIP AGREEMENT349; 4. PERIOD OF
LEARNERSHIP349; 5. OBLIGATION TO HIRE AS EMPLOYEE AFTER LEARNERSHIP PERIOD349; 6.
EMPLOYMENT OF MINORS AS LEARNERS349; 7. PROBATIONARY PERIOD IN LEARNABLE JOBS349;
8. WAGE RATE OF LEARNERS349; 9. INCENTIVES TO COMPANIES PARTICIPATING IN LEARNERSHIP
PROGRAMS350; 10. CANCELLATION OF LEARNERSHIP PROGRAMS350; 11. SETTLEMENT OF
DISPUTES INVOLVING VIOLATION OF A LEARNERSHIP AGREEMENT350.
Article 76. Learners in Piecework....350
NOTES AND COMMENTS:
1. SPECIAL RULE FOR LEARNERS IN PIECEWORK351.
Article 77. Penalty Clause.....351
NOTES AND COMMENTS:
1. GENERAL PENALTY CLAUSE351; 2. PENALTIES ARE PENAL IN NATURE351.
Chapter III...352
HANDICAPPED WORKERS...352
Article 78. Definition.....352
NOTES AND COMMENTS:
1. DEFINITION UNDER ARTICLE 78352; 2. DEFINITION UNDER R.A. NO. 6640352; 3. DEFINITION
UNDER R.A. NO. 7277352; 4. CHANGE IN NOMENCLATURE IN R.A. NO. 7277, AS AMENDED BY R.A. NO.
9442353.
Article 79. When Employable...353
NOTES AND COMMENTS:
1. JUSTIFICATION FOR EMPLOYMENT OF HANDICAPPED WORKERS353; 2. JUSTIFICATION FOR
EMPLOYMENT OF PERSONS WITH DISABILITY353; 3. INCENTIVES FOR EMPLOYERS WHO EMPLOY
PERSONS WITH DISABILITY354; 4. DISCRIMINATION ON EMPLOYMENT OF PERSONS WITH
DISABILITY355.
Article 80. Employment Agreement......356
NOTES AND COMMENTS:
1. EMPLOYMENT AGREEMENT356; 2. CONTENTS OF EMPLOYMENT AGREEMENT356; 3. WAGE
RATE OF HANDICAPPED WORKERS OR PERSONS WITH DISABILITY NO LONGER 75% OF MINIMUM
WAGE BUT FULL AMOUNT THEREOF357; 4. INSPECTION OF AGREEMENT BY THE SECRETARY OF
LABOR AND EMPLOYMENT357; 5. COPY OF AGREEMENT TO BE FURNISHED TO DOLE357.
Article 81. Eligibility for Apprenticeship.....357
NOTES AND COMMENTS:
1. ELIGIBILITY OF HANDICAPPED WORKERS OR PERSONS WITH DISABILITY FOR APPRENTICESHIP
AND LEARNERSHIP358; 2. WAGE RATE OF HANDICAPPED WORKERS OR PERSONS WITH DISABILITY
WHO ARE HIRED AS APPRENTICES OR LEARNERS358.
BOOK THREE
CONDITIONS OF EMPLOYMENT
Title I.....359
WORKING CONDITIONS AND REST PERIODS..........359

xii

Chapter I.......359
HOURS OF WORK....359
Article 82. Coverage.......359
NOTES AND COMMENTS:
1. LABOR STANDARDS359; 2. EMPLOYEES COVERED359; 3. EMPLOYEES NOT COVERED360; 4.
SPECIFIC PROVISIONS REFERRED TO UNDER THE EXCLUSIONARY CLAUSE IN ARTICLE 82371.
Article 83. Normal Hours of Work.......372
NOTES AND COMMENTS:
1. MANAGEMENT RIGHTS AND PREROGATIVES372; 2. PREROGATIVE TO CHANGE WORKING
HOURS373; 3. NORMAL HOURS OF WORK OF EMPLOYEES375; 4. WORK DAY, HOW
RECKONED375; 5. WORK WEEK; HOW RECKONED376; 6. REDUCTION OF EIGHT-HOUR WORKING
DAY376; 7. COMPRESSED WORKWEEK (CWW)376; 8. BROKEN HOURS381; 9. STAGGERED
WORKING TIME381; 10. WORK IN DIFFERENT SHIFTS382; 11. REDUCTION OF WORKDAYS ON
ACCOUNT OF LOSSES383; 12. FLEXIBLE WORK SCHEDULE UNDER R.A. NO. 8972383; 13. FLEXIBLE
WORK ARRANGEMENTS DURING ECONOMIC DIFFICULTIES AND NATIONAL EMERGENCIES383; 14.
HOURS OF WORK OF PART-TIME WORKERS384; 15. HOURS OF WORK OF HOSPITAL AND CLINIC
PERSONNEL385; 16. HOURS OF WORK OF PUBLIC HEALTH WORKERS388.
Article 84. Hours Worked......389
NOTES AND COMMENTS:
1. COMPENSABLE HOURS WORKED389; 2. PRINCIPLES IN DETERMINING HOURS WORKED389; 3.
COFFEE BREAKS AND REST PERIOD OF SHORT DURATION390; 4. WAITING TIME390; 5. SLEEPING,
WHEN CONSIDERED COMPENSABLE390; 6. WORKING WHILE ON CALL390; 7. TRAVEL TIME391;
8. PRELIMINARY AND POSTLIMINARY ACTIVITIES391; 9. ATTENDANCE IN LECTURES, MEETINGS
AND TRAINING PROGRAMS391; 10. ATTENDANCE IN CBA NEGOTIATIONS392; 11. ATTENDANCE IN
GRIEVANCE MEETINGS392; 12. ATTENDANCE IN HEARINGS OR CONFERENCES IN CASES FILED BY
EMPLOYEES AGAINST EMPLOYER392; 13. ATTENDANCE OR PARTICIPATION IN STRIKES OR
PICKETS393; 14. WORKING TIME OF SEAMEN OR SEAFARERS393; 15. SEMESTRAL BREAK OF
TEACHERS394; 16. EFFECTS OF POWER INTERRUPTIONS OR BROWN-OUTS395; 17. WORK
SUSPENSION DUE TO PEACE AND ORDER DISTURBANCE395.
Article 85. Meal Periods....396
NOTES AND COMMENTS:
1. GENERAL RULE ON MEAL PERIOD396; 2. SHORTENING OF MEAL TIME TO NOT LESS THAN 20
MINUTES; WHEN COMPENSABLE396; 3. SHORTENING OF MEAL TIME TO NOT LESS THAN 20
MINUTES, WHEN NOT COMPENSABLE396; 4. SHORTENING OF MEAL TIME TO LESS THAN 20
MINUTES; EFFECT397; 5. CHANGING FROM 30-MINUTE PAID ON CALL LUNCH BREAK TO 1 HOUR
MEAL TIME WITHOUT PAY, EFFECT397; 6. MEAL TIME INVOLVING SEVERAL SHIFTS398.
Article 86. Night Shift Differential...398
NOTES AND COMMENTS:
1. RATIONALE FOR ADDITIONAL COMPENSATION FOR NIGHT SHIFT WORK398; 2. EMPLOYEES NOT
COVERED398; 3. PERCENTAGE OF NIGHT SHIFT DIFFERENTIAL PAY399; 4. ADDITIONAL
COMPENSATION FOR WORK PERFORMED DURING NIGHT SHIFT399; 5. NIGHT SHIFT DIFFERENTIAL
PAY AND OVERTIME PAY; DISTINGUISHED399; 6. ADDITIONAL COMPENSATION FOR WORK ON
SCHEDULED REST DAY OR SPECIAL DAY399; 7. ADDITIONAL COMPENSATION FOR WORK ON
REGULAR HOLIDAYS399; 8. COMPUTATION OF NIGHT SHIFT DIFFERENTIAL PAY399; 9.
ILLUSTRATIONS400; 10. RELATION OF NIGHT SHIFT DIFFERENTIAL PAY BENEFIT PROVIDED
UNDER THE LABOR CODE TO EXISTING INDIVIDUAL OR COLLECTIVE BARGAINING AGREEMENTS
OR COMPANY PRACTICE OR POLICY402.
Article 87. Overtime Work.....403
NOTES AND COMMENTS:
1. OVERTIME WORK REFERS TO WORK RENDERED AFTER NORMAL EIGHT (8) HOURS OF WORK404;
2. ADDITIONAL COMPENSATION FOR OVERTIME WORK ON ORDINARY WORKING DAYS404; 3.
MEANING OF REGULAR WAGE OR BASIC SALARY FOR PURPOSES OF COMPUTING OVERTIME
PAY404; 4. PERMISSION BY THE EMPLOYER FOR THE EMPLOYEE TO RENDER OVERTIME WORK
NECESSARY TO BE ENTITLED TO OVERTIME PAY405; 5. PREMIUM PAY AND OVERTIME PAY;
DISTINGUISHED405; 6. RATIONALE FOR THE PAYMENT OF HIGHER RATE IN CASE OF OVERTIME
WORK OR WORK ON REST DAYS AND HOLIDAYS406; 7. PREMIUM PAY AND OVERTIME PAY FOR
HOLIDAY AND REST DAY WORK406; 8. ILLUSTRATIONS407; 9. TEACHING OVERLOAD AND
OVERTIME WORK IN PRIVATE SCHOOLS408; 10. VALIDITY OF STIPULATED OVERTIME RATES409;
11. BUILT-IN OVERTIME PAY409; 12. ENTITLEMENT OF SEAFARERS TO OVERTIME PAY409; 13.
OVERTIME WORK MUST BE DULY PROVED411; 14. EFFECT OF JUDICIAL ADMISSION BY EMPLOYER
OF OVERTIME WORK411; 15. PAYMENT OF OVERTIME PAY CANNOT CAUSE WAGE
DISTORTION412; 16. PAYMENT OF OVERTIME PAY CANNOT AMOUNT TO UNJUST
ENRICHMENT412; 17. EFFECT OF PAYMENT OF OVERTIME PAY TO EMPLOYEES NOT ENTITLED
THERETO412; 18. WAIVER OF OVERTIME PAY412; 19. EFFECT OF LACHES OR ESTOPPEL ON
CLAIMS FOR OVERTIME PAY413.
Article 88. Undertime Not Offset by Overtime.....413
NOTES AND COMMENTS:
1. SITUATIONS CONTEMPLATED UNDER ARTICLE 88413; 2. MEANING OF UNDERTIME WORK414; 3.
RULE ON LEAVE OF ABSENCE UNDER ARTICLE 88414.

xiii

Article 89. Emergency Overtime Work....415

NOTES AND COMMENTS:
1. COMPULSORY OVERTIME WORK415; 2. EMERGENCY OVERTIME WORK UNDER THE
IMPLEMENTING RULES416; 3. THE GENERAL RULE REMAINS THAT NO EMPLOYEE MAY BE
COMPELLED TO RENDER OVERTIME WORK AGAINST HIS WILL416; 4. RULE WHEN EMPLOYEE
REFUSES TO RENDER EMERGENCY OVERTIME WORK416; 5. OVERTIME BOYCOTT AS A FORM OF
ILLEGAL STRIKE417.
Article 90. Computation of Additional Compensation....417
NOTES AND COMMENTS:
1. MEANING OF REGULAR WAGE AS BASIS IN THE COMPUTATION OF OVERTIME PAY AND OTHER
ADDITIONAL REMUNERATIONS417; 2. NON-DIMINUTION OF BENEFITS, SUPPLEMENTS OR
PAYMENTS417.
Chapter II.....418
WEEKLY REST PERIODS......418
Article 91. Right to Weekly Rest Day...418
NOTES AND COMMENTS:
1. RATIONALE BEHIND THE RULE ON REST DAY418; 2. COVERAGE OF ARTICLE 91418; 3. BUSINESS
ON SUNDAYS AND HOLIDAYS418; 4. WEEKLY REST DAY419; 5. EMPLOYEES PREFERENCE OF REST
DAY BASED ON RELIGIOUS GROUNDS419; 6. SCHEDULE OF REST DAY419; 7. INVALIDITY OF
WAIVER OF COMPENSATION FOR WORK ON REST DAYS AND HOLIDAYS419; 8. MAY REST DAY
WORK BE OFFSET BY WORK ON REGULAR WORKDAYS?...419.
Article 92. When Employer May Require Work on a Rest Day.....420
NOTES AND COMMENTS:
1. COMPULSORY WORK ON SCHEDULED REST DAY420; 2. OBSERVATIONS ON ARTICLE 92 VIS--VIS
ITS IMPLEMENTING RULE421; 3. EXCLUSIVE CHARACTER OF THE ENUMERATION IN ARTICLE 92
AND ITS IMPLEMENTING RULES421.
Article 93. Compensation for Rest Day, Sunday or Holiday Work...421
NOTES AND COMMENTS:
1. EMPLOYEES NOT COVERED422; 2. ADDITIONAL COMPENSATION FOR WORK ON REST DAY OR
SUNDAY OR HOLIDAY422; 3. ILLUSTRATIONS423; 4. PAID-OFF DAYS423; 5. RELATION OF THE
LAW ON REST DAY TO EMPLOYMENT AGREEMENTS423.
Chapter III...424
HOLIDAYS, SERVICE INCENTIVE LEAVES AND SERVICE CHARGES.424
Article 94. Right to Holiday Pay...424
NOTES AND COMMENTS:
1. LAWS AMENDING ARTICLE 94424; 2. GENERAL ELECTIONS429; 3. NINOY AQUINO DAY [R.A. NO.
9236]429; 4. NATIONAL WOMENS DAY A WORKING SPECIAL HOLIDAY429; 5. OTHER HOLIDAYS
DECLARED UNDER PRESIDENTIAL PROCLAMATIONS429; 6. HOLIDAY PAY, MEANING AND
PURPOSE430; 7. COVERAGE; EXCEPTIONS431; 8. REGULAR HOLIDAY FALLING ON EMPLOYEES
REGULAR WORKDAY431; 9. REGULAR
HOLIDAY FALLING ON EMPLOYEES REST DAY432; 10.
TABLE OF CONTENTS
DECLARED SPECIAL DAYS OR SPECIAL HOLIDAYS433; 11. DECLARED SPECIAL WORKING
HOLIDAYS434; 12. DISTINCTION IN TERMS OF PAY BETWEEN REGULAR HOLIDAYS AND SPECIAL
DAYS/SPECIAL HOLIDAYS434; 13. RULE WHEN REGULAR HOLIDAY FALLS ON A SUNDAY434; 14.
EFFECT OF ABSENCES ON ENTITLEMENT TO HOLIDAY PAY435; 15. REGULAR HOLIDAY FALLING
DURING TEMPORARY OR PERIODIC SHUTDOWN AND TEMPORARY CESSATION OF WORK436; 16.
SUCCESSIVE REGULAR HOLIDAYS436; 17. TWO REGULAR HOLIDAYS FALLING ON THE SAME
DAY436; 18. HOLIDAY PAY OF PRIVATE SCHOOL TEACHERS438; 19. HOLIDAY PAY OF EMPLOYEES
PAID BY RESULTS439; 20. HOLIDAY PAY OF FIELD PERSONNEL440; 21. HOLIDAY PAY OF
SEASONAL WORKERS442; 22. HOLIDAY PAY OF EMPLOYEES WITH NO REGULAR WORKING
DAYS442; 23. DISTINCTION BETWEEN MONTHLY-PAID AND DAILY-PAID EMPLOYEES442; 24.
MONTHLY-PAID EMPLOYEES, NOT EXCLUDED FROM THE COVERAGE OF HOLIDAY PAY442; 25.
WHEN ENTITLEMENT TO HOLIDAY PAY OF MONTHLY-PAID EMPLOYEES SHOULD COMMENCE444;
26. WITHDRAWAL OF HOLIDAY PAY BENEFIT, NOT ALLOWED444; 27. EFFECT OF CBA STIPULATION
ON HOLIDAY PAY445; 28. EFFECT OF FAILURE TO SHOW PROOF OF PAYMENT OF HOLIDAY
PAY445; 29. OFFSETTING HOLIDAY WORK WITH WORK ON REGULAR DAYS, NOT ALLOWED445.
Article 95. Right to Service Incentive Leave....446
NOTES AND COMMENTS:
1. EFFECTIVITY OF THE GRANT OF SERVICE INCENTIVE LEAVE BENEFIT446; 2. RATIONALE FOR
THE LAW446; 3. COVERAGE OF SERVICE INCENTIVE LEAVE BENEFIT; EXCEPTIONS446; 4. RIGHT
TO SERVICE INCENTIVE LEAVE449; 5. MEANING OF ONE YEAR OF SERVICE.450; 6.
COMMUTATION TO CASH; BASIS OF COMPUTATION450; 7. GRANT OF SERVICE INCENTIVE LEAVE
BENEFIT IN EXCESS OF THE BENEFIT PROVIDED UNDER ARTICLE 95451; 8. RIGHT OF EMPLOYER
TO IMPOSE CONDITIONS FOR AVAILMENT OF LEAVE BENEFITS451; 9. RIGHT OF PART-TIME
WORKERS TO SERVICE INCENTIVE LEAVE452; 10. NO LABOR CODE PROVISION ON VACATION
LEAVE OR SICK LEAVE OR OTHER FORMS OF SIMILAR LEAVE BENEFITS...452; 11. EFFECT OF
FAILURE TO SHOW PROOF OF PAYMENT OF SERVICE INCENTIVE LEAVE BENEFIT453; 12.
EMPLOYMENT RELATIONSHIP NOT SUSPENDED DURING THE PERIOD OF SERVICE INCENTIVE
LEAVE OR VACATION LEAVE WITH PAY453; 13. OTHER FORMS OF LEAVE UNDER THE LABOR CODE
AND PERTINENT LAWS455; 14. SERVICE INCENTIVE LEAVE AS PART OF THE RETIREMENT

xiv

BENEFITS455; 15. RULE ON PRESCRIPTION OF CLAIM FOR SERVICE INCENTIVE LEAVE, DIFFERENT
FROM THE RULE GENERALLY APPLICABLE TO MONETARY CLAIMS456; 16. COMPUTATION OF
SERVICE INCENTIVE LEAVE PAY OF AN ILLEGALLY DISMISSED EMPLOYEE IS NOT LIMITED TO 3
YEARS457.
Article 96. Service Charges...458
NOTES AND COMMENTS:
1. COVERAGE458; 2. DISTRIBUTION OF SERVICE CHARGES458; 3. FREQUENCY OF
DISTRIBUTION459; 4. RULE IF SERVICE CHARGE IS ABOLISHED459; 5. TIPS459; 6. SERVICE
CHARGE IS NOT IN THE NATURE OF A PROFIT SHARE AND, THEREFORE, CANNOT BE DEDUCTED
FROM WAGE. ..459.
Title II...461
WAGES....461
Chapter I.......461
PRELIMINARY MATTERS....461
Article 97. Definitions....461
NOTES AND COMMENTS:
1. PERSON462; 2. EMPLOYER AND EMPLOYEE463; 3. AGRICULTURE463; 4. WAGE464.
Article 98. Application of Title......473
NOTES AND COMMENTS:
1. COVERAGE473; 2. RATIONALE FOR THE LAW474.
Chapter II.....475
MINIMUM WAGE RATES......475
Article 99. Regional Minimum Wages.....475
NOTES AND COMMENTS:
1. MINIMUM WAGE; CONCEPT AND RATIONALE475; 2. LAWS GRANTING MINIMUM WAGES AND
LIVING ALLOWANCES476; 3. WAGE FIXING NO LONGER MADE BY LAW BUT BY WAGE ORDERS
ISSUED BY REGION THROUGH THE VARIOUS RTWPBs479; 4. EFFECT OF THE CONCEPT OF EQUAL
PAY FOR EQUAL WORK ON SALARY DIFFERENCES OCCASIONED BY MANDATED WAGE
INCREASE479; 5. EMPLOYERS UNIFORM NATIONAL WAGE STRUCTURE IS ANTITHETICAL TO R.A.
NO. 6727481; 6. BASIS OF MINIMUM WAGE RATES481; 7. INTEGRATION OF MONETARY BENEFITS
INTO THE BASIC PAY481; 8. EQUIVALENT MONTHLY STATUTORY MINIMUM WAGE RATES OF
DAILY-PAID EMPLOYEES482; 9. FACTORS/DIVISORS IN THE COMPUTATION OF BENEFITS AND
WAGE DEDUCTIONS483; 10. REGIONAL MINIMUM WAGE RATES488; 11. MINIMUM WAGE RATES
OF SPECIAL GROUPS OF WORKERS490; 12. MINIMUM WAGE RATES OF WORKERS OF
CONTRACTORS FOR CONSTRUCTION PROJECTS, SECURITY, JANITORIAL AND SIMILAR
SERVICES491; 13. WAGE RULES AFFECTING PRIVATE EDUCATIONAL INSTITUTIONS491; 14.
MINIMUM WAGE RATES OF WORKERS PAID BY RESULTS501; 15. MINIMUM WAGE RATES OF
HOUSEHOLD OR DOMESTIC HELPERS AND FAMILY DRIVERS501; 16. MINIMUM WAGE RATES OF
MOBILE AND BRANCH WORKERS502; 17. EFFECT OF TRANSFER OF PERSONNEL FROM ONE REGION
TO ANOTHER ON APPLICABLE MINIMUM WAGE RATES502; 18. RECKONING OF UNPAID WAGES OR
WAGE DIFFERENTIALS IN ILLEGAL DISMISSAL CASES503; 19. EFFECT OF THE REDUCTION OF
WORKDAYS ON WAGES503.
Article 100. Prohibition Against Elimination or Diminution of Benefits503
NOTES AND COMMENTS:
1. APPLICATION OF ARTICLE 100503; 2. NON-DIMINUTION PROVISION UNDER ARTICLE 127504; 3.
APPLICABILITY OF THE NON-ELIMINATION OR NON-DIMINUTION PRINCIPLE IN ARTICLE 100504;
4. ELIMINATION OR DIMINUTION OF BENEFITS MAY CONSTITUTE DEMOTION OR CONSTRUCTIVE
DISMISSAL506; 5. COMPANY PRACTICE507; 6. BONUS514; 7. THIRTEENTH (13th) MONTH PAY522;
8. FOURTEENTH (14TH) MONTH PAY, FIFTEENTH (15TH) MONTH PAY AND THE LIKE541.
Article 101. Payment by Results........541
NOTES AND COMMENTS:
1. PAYMENT BY RESULTS; NATURE541; 2. CATEGORIES OF WORKERS PAID BY RESULTS542; 3.
PAYMENT BY RESULTS ACCORDING TO THE RULES TO IMPLEMENT THE LABOR CODE542; 4.
PAYMENT BY RESULTS UNDER R.A. NO. 6640 AND ITS IMPLEMENTING RULES543; 5. PAYMENT BY
RESULTS UNDER R.A. NO. 6727 AND ITS IMPLEMENTING RULES544; 6. PAYMENT BY RESULTS UNDER
WAGE ORDERS ISSUED BY RTWPBs545.
Chapter III...546
PAYMENT OF WAGES....546
Article 102. Forms of Payment.....546
NOTES AND COMMENTS:
1. MANNER AND FORM OF PAYMENT OF WAGES546; 2. EVIDENCE OF PAYMENT OF WAGES OR
SALARIES AND BENEFITS546; 3. PAYMENT OF MONETARY CLAIMS; BURDEN OF PROOF548; 4.
PAYMENT OF SALARIES OF PUBLIC HEALTH WORKERS549; 5. PENALTY FOR VIOLATION UNDER
THE REVISED PENAL CODE549.
Article 103. Time of Payment........549
NOTES AND COMMENTS:
1. TIME OF PAYMENT OF WAGES550; 2. TIME OF PAYMENT OF WAGES TO WORKERS PAID BY
RESULTS OR ON TASK BASIS550; 3. RULE IN CASE OF STIPULATION ON THE TIME OF PAYMENT OF
WAGES IN AN EMPLOYMENT CONTRACT OR CBA OR UNDER COMPANY POLICY OR PRACTICE550.

xv

Article 104. Place of Payment.......550

NOTES AND COMMENTS:
1. PLACE OF PAYMENT OF WAGES550; 2. EXCEPTIONS550; 3. PROHIBITION ON PAYMENT OF
WAGES IN BARS, MASSAGE CLINICS OR NIGHTCLUBS551; 4. PAYMENT THROUGH BANKS551; 5.
PAYMENT THROUGH AUTOMATED TELLER MACHINE (ATM)551.
Article 105. Direct Payment of Wages......552
NOTES AND COMMENTS:
1. DIRECT PAYMENT OF WAGES552; 2. WAGES OF DECEASED EMPLOYEE552.
Article 106. Contractor or Subcontractor....554
Article 107. Indirect Employer......555
Article 108. Posting of Bond.....555
Article 109. Solidary Liability...555
NOTES AND COMMENTS:
1. LABOR CODE PROVISIONS ON CONTRACTUALIZATION555; 2. OTHER LAWS OR RULES
GOVERNING CONTRACTUALIZATION556; 3. GUIDING PRINCIPLES557; 4. COVERAGE557; 5.
TRILATERAL RELATIONSHIP IN A CONTRACTING/SUBCONTRACTING ARRANGEMENT...557; 6.
PERMISSIBLE OR LEGITIMATE JOB CONTRACTING/SUBCONTRACTING ARRANGEMENT558; 7.
LABOR-ONLY CONTRACTING562; 8. TESTS TO DETERMINE THE EXISTENCE OF PEERMISSIBLE OR
LEGITIMATE JOB CONTRACTING/SUBCONTRACTING ARRANGEMENT562; 9. PERFORMANCE BY A
CONTRACTUAL EMPLOYEE OF ACTIVITIES DIRECTLY RELATED TO THE MAIN BUSINESS OF THE
PRINCIPAL MAKES HIM A REGULAR EMPLOYEE OF THE PRINCIPAL573; 10. PERFORMANCE BY A
CONTRACTUAL EMPLOYEE OF SPECIFIC SPECIAL OR TECHNICAL SERVICES MAKES THE
ARRANGEMENT
A
PERMISSIBLE
JOB
CONTRACTORSHIP/SUBCONTRACTORSHIP575;
11.
PERFORMANCE BY A CONTRACTUAL EMPLOYEE OF WORK WITHIN OR OUTSIDE OF THE PREMISES
OF THE PRINCIPAL IS NOT MATERIAL IN DETERMINING THE PERMISSIBILITY OF THE
CONTRACTING/ SUBCONTRACTING ARRANGEMENT576; 12. PRINCIPAL DISTINCTIONS BETWEEN
LEGITIMATE JOB CONTRACTING AND LABOR-ONLY CONTRACTING576; 13. STIPULATION IN THE
CONTRACT ON NON-EXISTENCE OF EMPLOYMENT RELATIONSHIP BETWEEN THE PRINCIPAL AND
THE EMPLOYEES OF THE CONTRACTOR/SUBCONTRACTOR, NOT CONTROLLING578; 14.
EMPLOYMENT RELATIONSHIP AND INDEPENDENT CONTRACTING/
SUBCONTRACTING
ARRANGEMENT, DISTINGUISHED579;
15.CONTENTS
EMPLOYMENT, JOINT VENTURE AND JOB CONTRACTING,
TABLE OF
DISTINGUISHED590; 16. PLACEMENT ACTIVITIES UNDER ARTICLES 25 TO 39 OF THE LABOR CODE
DISTINGUISHED FROM JOB CONTRACTING/ SUBCONTRACTING ARRANGEMENT590; 17.
CONTRACTING ACTIVITIES IN THE CONSTRUCTION INDUSTRY591; 18. GOVERNMENT AS
CONTRACTOR592; 19. COOPERATIVES AS CONTRACTORS592; 20. EMPLOYMENT AND WORKING
CONDITIONS OF SECURITY GUARDS AND SIMILAR PERSONNEL IN THE PRIVATE SECURITY
INDUSTRY594; 21. PRINCIPAL AS DIRECT OR INDIRECT EMPLOYER601; 22. LIABILITY OF
PRINCIPAL
IN
GENERAL603;
23.
JUDICIAL
NOTICE
OF
VALIDITY
OF
JOB
CONTRACTING/SUBCONTRACTING ARRANGEMENT619; 24. WHEN CONTRACTING OUT OF JOB,
WORK OR SERVICE CONSTITUTES AN UNFAIR LABOR PRACTICE619; 25. TERMINATION OF
EMPLOYMENT
OF
CONTRACTUAL
EMPLOYEES
UNDER
A
LEGITIMATE
CONTRACTING/SUBCONTRACTING ARRANGEMENT620; 26. TERMINATION OF EMPLOYMENT OF
CONTRACTUAL EMPLOYEES UNDER A LABOR-ONLY CONTRACTING ARRANGEMENT622; 27.
BURDEN
TO
PROVE
EXISTENCE
OF
LEGITIMATE
CONTRACTING/SUBCONTRACTING
ARRANGEMENT624;
28.
POSTING
OF
BOND
BY
THE
LEGITIMATE
CONTRACTOR/SUBCONTRACTOR625;
29.
REGISTRATION
OF
CONTRACTORS/SUBCONTRACTORS626;
30.
ANNUAL
REPORTING
OF
REGISTERED
CONTRACTORS/SUBCONTRACTORS628; 31. DELISTING OF CONTRACTORS/SUBCONTRACTORS628;
32. ENFORCEMENT OF LABOR STANDARDS AND WORKING CONDITIONS629.
Article 110. Worker Preference in Case of Bankruptcy.629
NOTES AND COMMENTS:
1. WORKERS PREFERENCE IN CASE OF BANKRUPTCY629; 2. EFFECT OF SUSPENSION OF PAYMENT
OF DEBTS (REHABILITATION RECEIVERSHIP) ON WORKERS PREFERENCE IN CASE OF BANKRUPTCY
OR LIQUIDATION637.
Article 111. Attorneys Fees......642
NOTES AND COMMENTS:
1. ARTICLE 111 AND ARTICLE 222; DISTINGUISHED642; 2. TWO (2) CONCEPTS OF ATTORNEYS
FEES643; 3. 10% ATTORNEYS FEES646; 4. CLAIM FOR ATTORNEYS EEES, WHERE ASSERTED649;
5. ATTORNEYS FEES IN EXCESS OF 10% UNLAWFUL650; 6. JUDICIAL CONTROL OF ATTORNEYS
FEES650; 7. PRINCIPLE OF QUANTUM MERUIT651; 8. NON-LAWYERS ARE NOT ENTITLED TO
ATTORNEYS FEES653; 9. UNION SERVICE FEES653; 10. ATTORNEYS FEES DISALLOWED IN CASE
PARTY IS REPRESENTED BY PAO LAWYERS655; 11. PROHIBITION AGAINST DEDUCTION FOR
ATTORNEYS FEES IN EMPLOYEES COMPENSATION CASES655; 12. RETAINER FEES657; 13.
CONTINGENCY FEE ARRANGEMENT657; 14. ATTORNEYS FEES AND MORAL DAMAGES657; 15.
PENALTY FOR VIOLATION OF ARTICLE 111657.
Chapter IV.......658
PROHIBITIONS REGARDING WAGES......658
Article 112. Non-Interference in Disposal of Wages..658

xvi

NOTES AND COMMENTS:

1. NON-INTERFERENCE BY EMPLOYER IN THE DISPOSAL BY EMPLOYEES OF THEIR WAGES658; 2.
WAGES NOT SUBJECT TO EXECUTION OR ATTACHMENT; EXCEPTION658; 3. PENALTY FOR
VIOLATION OF ARTICLE 112658; 4. PENALTY UNDER THE REVISED PENAL CODE658; 5. CRIMINAL
PROSECUTION FOR VIOLATION OF THE PENAL PROVISIONS OF THE LABOR CODE ON WAGES, HOW
INITIATED658.
Article 113. Wage Deduction........660
NOTES AND COMMENTS:
1. GENERAL RULE661; 2. PERMISSIBLE DEDUCTIONS FROM WAGES UNDER THE LABOR CODE AND
OTHER LAWS661; 3. SET-OFF OF DEBT DUE TO THE EMPLOYER AGAINST THE EMPLOYEES
MONETARY CLAIMS662; 4. DEDUCTIONS DUE TO TARDINESS OR ABSENCES663; 5. DEDUCTIONS
FROM 13TH MONTH PAY663; 6. DEDUCTIONS FROM SALARIES OF PUBLIC HEALTH WORKERS663; 7.
DEDUCTIONS DUE TO LOSSES ON ACCOUNT OF ALLEGED NEGLIGENCE664; 8. DEDUCTIONS DUE TO
ERROR IN THE AUTOMATED PAYROLL SYSTEM664; 9. DEDUCTIONS WHICH, EVEN IF AGREED TO
BY THE EMPLOYEE, WERE HELD TO BE ILLEGAL AND INEQUITOUS AND, THEREFORE, NULL AND
VOID664; 10. PENALTY FOR VIOLATION OF ARTICLE 113665.
Article 114. Deposits for Loss or Damage...665
NOTES AND COMMENTS:
1. PROHIBITION AGAINST DEPOSIT REQUIREMENT665; 2. PERMISSIBLE DEDUCTIONS FOR LOSS OR
DAMAGES665; 3. PENALTY FOR VIOLATION OF ARTICLE 114665.
Article 115. Limitations.....666
NOTES AND COMMENTS:
1. DUE PROCESS REQUIRED BEFORE DEDUCTION FROM DEPOSITS MAY BE VALIDLY MADE.666; 2.
PRE-REQUISITES BEFORE DEDUCTION MAY BE MADE VALIDLY666.
Article 116. Withholding of Wages and Kickbacks Prohibited..666
NOTES AND COMMENTS:
1. PROHIBITION ON WITHHOLDING OF WAGES666; 2. KICKBACKS667; 3. PENALTY FOR
VIOLATION OF ARTICLE 116667.
Article 117. Deduction to Ensure Employment...667
NOTES AND COMMENTS:
1. PROHIBITION AGAINST DEDUCTION TO ENSURE EMPLOYMENT667; 2. PENALTY FOR VIOLATION
OF ARTICLE 117667.
Article 118. Retaliatory Measures....667
NOTES AND COMMENTS:
1. RETALIATORY ACTIONS BY EMPLOYER667; 2. WHEN THE RETALIATORY ACT IS CONSIDERED
UNFAIR LABOR PRACTICE668; 3. PENALTY FOR VIOLATION OF ARTICLE 118668
Article 119. False Reporting.....668
NOTES AND COMMENTS:
1. FALSE STATEMENT, REPORT OR RECORD668; 2. PENALTY FOR VIOLATION OF ARTICLE 119669.
Chapter V........670
WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION.670
Article 120. Creation of National Wages and Productivity Commission..670
NOTES AND COMMENTS:
1. R.A. NO. 6727 [WAGE RATIONALIZATION ACT]670; 2. DECLARED POLICY670; 3. ABOLITION OF
THE NATIONAL WAGES COUNCIL (NWC) AND NATIONAL PRODUCTIVITY COMMISSION (NPC)671; 4.
HEADQUARTERS OF THE NWPC671; 5. RELATION TO DOLE671.
Article 121. Powers and Functions of the Commission..........671
NOTES AND COMMENTS:
1. POWERS AND FUNCTIONS672; 2. PRIMARY JURISDICITION OF NWPC673; 3. RULE-MAKING
POWER AND POWER OF REVIEW OF THE NWPC673; 4. POWER OF COMMISSION CHAIRMAN TO
ORGANIZE AND APPOINT PERSONNEL674; 5. COMPOSITION OF THE COMMISSION674; 6.
COMPENSATION AND RANK OF SECTORAL REPRESENTATIVES675; 7. COMMISSION
SECRETARIAT675.
Article 122. Creation of Regional Tripartite Wages and Productivity Boards.675
NOTES AND COMMENTS:
1. REGIONAL BOARDS; RATIONALE FOR THEIR CREATION676; 2. COMPOSITION676; 3. REGIONAL
BOARD SECRETARIAT677; 4. POWERS AND FUNCTIONS677; 5. NATURE OF THE POWER OF RTWPBs
TO ISSUE WAGE ORDERS677; 6. IMPLEMENTATION OF PLANS, PROGRAMS AND PROJECTS OF
RTWPBs...677; 7. POLICY DIRECTIONS AND PROGRAM THRUSTS : YEARS 2006-2010678; 8. THE
VARIOUS REGIONS OF THE COUNTRY679.
Article 123. Wage Order....679
Article 124. Standards/Criteria for Minimum Wage Fixing..679
NOTES AND COMMENTS:
1. JOINT DISCUSSION OF ARTICLES 123 AND 124681; 2. AMENDED RULES OF PROCEDURE ON
MINIMUM WAGE FIXING682; 3. WAGE DISTORTION696; 4. EXEMPTION FROM WAGE ORDER704;
5. EXECUTION OF DENIED/DISAPPROVED/DISMISSED APPLICATIONS FOR EXEMPTION724; 6. TAX
EXEMPTION OF MINIMUM WAGE EARNERS FROM PAYMENT OF INCOME TAX ON THEIR TAXABLE
INCOME725; 7. OBLIGATION OF EMPLOYERS TO COMPLY WITH REGISTRATION AND
REPORTORIAL REQUIREMENTS726; 8. R.A. NO. 8188 - INCREASING THE PENALTY AND IMPOSING

xvii

DOUBLE INDEMNITY FOR VIOLATION OF PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE

RATES726; 9. APPEAL TO THE COMMISSION (NWPC)728; 10. QUORUM729; 11. DISPOSITION OF
PENDING MATTERS729; 12. OFFICIAL RECORDS729.
Article 125. Freedom to Bargain......730
NOTES AND COMMENTS:
1. WAGE INCREASES THROUGH COLLECTIVE BARGAINING730; 2. WAGE INCREASES AND BENEFITS
FROM CBA AND LAW; DISTINCTION730; 3. LAW IS PRESUMED PART OF CBA734; 4. PROHIBITION
ON CBA STIPULATIONS BELOW MINIMUM LEGAL STANDARDS...734; 5. BINDING EFFECT OF CBA734;
6. MANDATORY CBA REGISTRATION REQUIREMENT734; 7. OBLIGATION OF EMPLOYER TO
RESPECT THE CBA735; 8. SUSPENSION OF CBA NEGOTIATIONS FOR TEN (10) YEARS HELD
VALID736.
Article 126. Prohibition Against Injunction738
NOTES AND COMMENTS:
1. INJUNCTION AGAINST PROCEEDINGS BEFORE THE RTWPBs AND THE NWPC, PROHIBITED738; 2.
JUDICIAL REVIEW738
Article 127. Non-Diminution of Benefits.....739
NOTES AND COMMENTS:
1. NON-DIMINUTION OF BENEFITS PROVIDED UNDER R.A. NO. 6727739; 2. NON-DIMINUTION OF
BENEFITS UNDER ARTICLE 127739; 3. REPLICATION OF THE PROVISION OF ARTICLE 127 IN WAGE
ORDERS739
Chapter VI............740
ADMINISTRATION AND ENFORCEMENT...740
Article 128. Visitorial and Enforcement Power.......740
NOTES AND COMMENTS:
1. THREE (3) KINDS OF POWER UNDER ARTICLE 128741; 2. VISITORIAL POWER UNDER ARTICLE
128742; 3. ENFORCEMENT POWER UNDER ARTICLE 128742;4. NO INJUNCTION MAY BE ISSUED
AGAINST THE EXERCISE OF THE ENFORCEMENT POWER UNDER ARTICLE 128764; 5. PENALTY FOR
VIOLATION OF, OR ABUSE OF AUTHORITY BY, GOVERNMENT EMPLOYEES UNDER ARTICLE 128765;
6. MAINTENANCE OF EMPLOYMENT RECORDS AS REQUIRED UNDER ARTICLE 128765; 7. RULES ON
THE DISPOSITION OF LABOR STANDARDS CASES IN THE REGIONAL OFFICES767;
Article 130. Nightwork Prohibition......807
NOTES AND COMMENTS:
1. PROHIBITION AGAINST NIGHTWORK OF WOMEN EMPLOYEES807.
Article 131. Exceptions......807
NOTES AND COMMENTS:
1. EXCEPTIONS TO THE PROHIBITIONS IN ARTICLE 130808.
Article 132. Facilities for Women.....808
NOTES AND COMMENTS:
1. FACILITIES FOR WOMEN EMPLOYEES809; 2. RELATION OF ARTICLE 132 TO AGREEMENTS810.
Article 133. Maternity Leave Benefits......810
NOTES AND COMMENTS:
1. MATERNITY LEAVE, DEFINED810; 2. PARAGRAPHS [A] AND [C] OF ARTICLE 133 NO LONGER
APPLY810; 3. PARAGRAPH [B] OF ARTICLE 133 STILL APPLIES813; 4. LIMITATION ON MATERNITY
LEAVE BENEFITS813; 5. RELATION OF THE MATERNITY LEAVE PROVISION UNDER THE LAW TO
AGREEMENTS814; 6. PATERNITY LEAVE ACT OF 1996814.
Article 134. Family Planning Services; Incentives for Family Planning.815
NOTES AND COMMENTS:
1. REQUIREMENT UNDER PARAGRAPH [A] OF ARTICLE 134815; 2. INCENTIVE BONUS SCHEMES815.
Article 135. Discrimination Prohibited....816
NOTES AND COMMENTS:
1. ACTS OF DISCRIMINATION PROHIBITED UNDER ARTICLE 135816; 2. CRIMINAL LIABILITY FOR
COMMISSION OF DISCRIMINATORY ACTS816; 3. SPECIAL LAWS RELEVANT TO ARTICLE 135817.
Article 136. Stipulation Against Marriage.......843
NOTES AND COMMENTS:
1. INVALIDITY OF STIPULATION AGAINST MARRIAGE844; 2. RELEVANT JURISPRUDENCE844.
Article 137. Prohibited Acts.......845
NOTES AND COMMENTS:
1. PROHIBITED ACTS UNDER ARTICLE 137 AND ITS IMPLEMENTING RULES846; 2. DENIAL OF
BENEFITS OR DISMISSAL OF A WOMAN EMPLOYEE TO DEPRIVE HER OF BENEFITS846; 3.
DISCHARGING A WOMAN DUE TO PREGNANCY846; 4. DISCHARGING A WOMAN EMPLOYEE FOR
HAVING FILED A CASE OR FOR TESTIFYING OR BEING ABOUT TO TESTIFY IN A CASE847; 5.
PENALTY FOR COMMISSION OF THE PROHIBITED ACTS UNDER ARTICLE 137848.
Article 138. Classification of Certain Women Workers.....848
NOTES AND COMMENTS:
1. SPECIAL PROVISION FOR WOMEN WORKING IN NIGHT CLUBS AND SIMILAR
ESTABLISHMENTS848; 2. REGULARITY OF EMPLOYMENT848; 3. HOSPITALITY GIRLS ARE NOT
REGULAR EMPLOYEES848.
Chapter II.....849
EMPLOYMENT OF MINORS.....849

xviii

Article 139. Minimum Employable Age...849

NOTES AND COMMENTS:
1. SIGNIFICANCE OF ARTICLES 139 AND 140849; 2. ARTICLES 139 AND 140 SHOULD BE VIEWED AND
UNDERSTOOD WITHIN THE CONTEXT OF THE NEW LAWS AFFECTING THE EMPLOYMENT OF
CHILDREN849; 3. HISTORICAL DEVELOPMENT IN THE LAWS AFFECTING THE EMPLOYMENT AND
WELFARE OF CHILDREN849; 4. CURRENT GOVERNING LAW ON THE EMPLOYMENT OF
CHILDREN853; 5. POLICY OF THE LAW AS ENUNCIATED IN R. A. NO. 9231854; 6. RULES
IMPLEMENTING THE LATEST AMENDATORY LAW [R.A. NO. 9231]855; 7. WORKING CHILD855; 8.
EMPLOYER OF A WORKING CHILD855; 9. PROHIBITION ON THE EMPLOYMENT OF CHILDREN
BELOW 15 YEARS OF AGE; EXCEPTIONS AND CONDITIONS856; 10. PROHIBITION ON THE
EMPLOYMENT OF CHILDREN IN WORST FORMS OF CHILD LABOR856; 11. PROHIBITION ON THE
EMPLOYMENT OF CHILDREN IN CERTAIN ADVERTISEMENTS859; 12. PROHIBITION AGAINST CHILD
DISCRIMINATION UNDER ARTICLE 140 OF THE LABOR CODE859; 13. HOURS OF WORK OF A
WORKING CHILD860; 14. EMPLOYMENT OF CHILDREN AS HOMEWORKERS860; 15. EMPLOYMENT
OF CHILDREN AS HOUSEHELPERS860; 16. EMPLOYMENT OF CHILDREN AS LEARNERS860; 17.
REGULARITY OF EMPLOYMENT OF WORKING CHILDREN860; 18. WORK PERMIT861; 19. INCOME
OF A WORKING CHILD864; 20. ACCESS TO EDUCATION AND TRAINING FOR THE WORKING
CHILD865; 21. ACCESS TO IMMEDIATE LEGAL, MEDICAL AND PSYCHO-SOCIAL SERVICES865; 22.
ENFORCEMENT AND ADMINISTRATION866; 23. INDUSTRY GUIDELINES AND SELF-POLICING
MECHANISMS867; 24. ADMINISTRATION OF TRUST FUND TO BE SET UP FROM FINES AND
PENALTIES868; 25. FILING OF COMPLAINTS FOR VIOLATIONS OF R.A. NO. 7610, AS AMENDED BY R.A.
NO. 9231868; 26. SPEEDY DISPOSITION OF CASES INVOLVING CHILDREN869; 27. PENAL
PROVISIONS FOR VIOLATION OF R.A. NO. 7610, AS AMENDED BY R.A. NO. 9231869; 28. PAYMENT OF
SEPARATION PAY IN CASE OF CLOSURE DUE TO VIOLATION OF R.A. NO. 7610, AS AMENDED BY R.A.
NO. 9231870; 29. PERTINENT PROVISIONS OF P.D. NO. 603871; 30. EMPLOYMENT OF POOR BUT
DESERVING STUDENTS DURING SUMMER AND/OR CHRISTMAS VACATIONS873; 31. YOUTH
EDUCATION YOUTH EMPLOYMENT PROJECT (YE-YE PROJECT)874.
Chapter III...875
EMPLOYMENT OF HOUSEHELPERS....875
Article 141. Coverage....875
NOTES AND COMMENTS:
1. COVERAGE OF CHAPTER III, TITLE III, BOOK III ON EMPLOYMENT OF HOUSEHELPERS875; 2.
HOUSEHELPER875; 3. DOMESTIC OR HOUSEHOLD SERVICE875; 4. HOUSEHOLD EMPLOYER875;
5. LAW APPLIES IRRESPECTIVE OF METHOD OF PAYMENT OF WAGES876.
Article 142. Contract of Domestic Service.......876
NOTES AND COMMENTS:
1. TERM OF EMPLOYMENT CONTRACT OF HOUSEHELPERS876; 2. RELEVANT PROVISION IN THE
CIVIL CODE876.
Article 143. Minimum Wage.....876
Article 144. Minimum Cash Wage... ...876
NOTES AND COMMENTS:
1. JOINT DISCUSSION OF ARTICLES 143 AND 144877; 2. MINIMUM WAGE RATES PRESCRIBED BY
RTWPBs DO NOT INCLUDE THOSE FOR HOUSEHOLD OR DOMESTIC HELPERS877; 3. LAW
PRESCRIBING MINIMUM WAGE RATES FOR HOUSEHELPERS877; 4. INCREASE IN HOUSEHELPERS
MINIMUM WAGE RATES DEPENDS SOLELY ON THE EMPLOYERS878; 5. NO STANDARDS OR
CRITERIA FOR FIXING THE MINIMUM WAGE RATES OF HOUSHELPERS878; 6. MINIMUM WAGE
RATES PRESCRIBED UNDER ARTICLE 143 ARE ON A MONTHLY BASIS878; 7. AMOUNT OF THE
LEGALLY-MANDATED MINIMUM WAGE RATES DEPENDS ON THE GEOGRAPHICAL AREA WHERE
HOUSEHELPERS WORK878; 8. PAYMENT OF HOUSEHELPERS WAGE BY RESULTS879; 9.
PROHIBITED REDUCTION OF PAY879; 10. TIME AND MANNER OF PAYMENT879; 11. SSS COVERAGE
OF HOUSEHELPERS879; 12. PENALTY FOR VIOLATION OF R.A. NO. 7655 [OR ARTICLE 143]881; 13.
JURISDICTION OVER CASES INVOLVING HOUSEHELPERS881; 14. RELATION OF ARTICLE 143 TO
OTHER LAWS AND AGREEMENT881.
Article 145. Assignment to Non-Household Work.881
NOTES AND COMMENTS:
1. COMPENSATION FOR NON-HOUSEHOLD WORK OF HOUSEHELPERS881; 2. HOUSEHELPERS
WORKING IN THE COMPANY PREMISES OF EMPLOYERS882.
Article 146. Opportunity for Education...883
NOTES AND COMMENTS:
1. LAWS MANDATING THE GRANT OF OPPORTUNITY FOR EDUCATION TO HOUSEHELPERS883; 2.
DISTINCTIONS AMONG THE LAWS884; 3. HOUSEHELPERS UNDER THE AGE OF EIGHTEEN (18)
YEARS ARE CONSIDERED WORKING CHILDREN UNDER R.A. NO. 7610, AS AMENDED884; 4. NO
PERSON BELOW FIFTEEN (15) YEARS OF AGE MAY BE EMPLOYED AS HOUSEHELPER OUTSIDE OF
THE DIRECT AND SOLE RESPONSIBILITY OF HIS PARENTS OR LEGAL GUARDIAN885.
Article 147. Treatment of Househelpers..885
NOTES AND COMMENTS:
1. PROVISION UNDER THE LABOR CODE885; 2. PROVISION UNDER THE CIVIL CODE885; 3. HOURS
OF WORK OF HOUSEHELPERS885; 4. OVERTIME WORK886; 5. MONTHLY VACATION886.
Article 148. Board, Lodging, and Medical Attendance......887

xix

NOTES AND COMMENTS:

1. BOARD, LODGING AND MEDICAL ATTENDANCE, NOT PART OF COMPENSATION OF
HOUSEHELPERS887; 2. BOARD, LODGING AND MEDICAL ATTENDANCE SHOULD BE PROVIDED FREE
OF CHARGE887; 3. MEDICAL ATTENDANCE GENERALLY DOES NOT INCLUDE EXPENSES OF
HOSPITALIZATION887; 4. RULE IN THE CASE OF CHILDREN OR RELATIVES OF HOUSEHELPERS
WHO LIVE UNDER THE EMPLOYERS ROOF888; 5. FUNERAL EXPENSES IN CASE OF DEATH OF
HOUSEHELPER888; 6. DISPOSITION OF HOUSEHELPERS CORPSE OTHER THAN BURIAL889.
Article 149. Indemnity for Unjust Termination of Services...889
NOTES AND COMMENTS:
1. APPLICABILITY OF ARTICLE 149889; 2. HOUSEHELPERS CAN NEVER ACQUIRE REGULARITY OF
EMPLOYMENT...889; 3. EMPLOYMENT OF HOUSEHELPERS IS FIXED-TERM IN NATURE890; 4. NO LAW
GRANTS PROBATIONARY EMPLOYMENT TO HOUSEHELPERS890; 5. CONCEPT OF REGULAR
EMPLOYMENT IN ARTICLE 280 DOES NOT CONTEMPLATE HOUSEHOLD SERVICES RENDERED BY
HOUSEHELPERS892; 6. HOUSEHELPERS ARE NOT ENTITLED TO THE RELIEFS GRANTED UNDER
ARTICLE 279 OF THE LABOR CODE892; 7. THE EMPLOYMENT OF HOUSEHELPERS CEASES UPON ITS
EXPIRATION892; 8. THE CONTRACT OF EMPLOYMENT OF HOUSEHELPERS IS TERMINABLE BY
MERE NOTICE893; 9. HOUSEHELPERS ENJOY SECURITY OF TENURE ONLY DURING THE
EFFECTIVITY OF THEIR FIXED-TERM EMPLOYMENT893; 10. OBSERVANCE OF DUE PROCESS IN
TERMINATION OF EMPLOYMENT OF HOUSEHELPERS893; 11. CONSEQUENCES OF UNJUST
TERMINATION OF FIXED-TERM EMPLOYMENT895.
Article 150. Service of Termination Notice.....895
NOTES AND COMMENTS:
1. APPLICABILITY OF ARTICLE 150895; 2. NOTICE REQUIREMENT895; 3. RATIONALE BEHIND THE
NOTICE REQUIREMENT895; 4. RELEVANT CIVIL CODE PROVISION895.
Article 151. Employment Certification....896
NOTES AND COMMENTS:
1. ISSUANCE OF EMPLOYMENT CERTIFICATE896; 2. PERTINENT CIVIL CODE PROVISION896.
Article 152. Employment Record...............896
NOTES AND COMMENTS:
1. RECORD OF EMPLOYMENT896; 2. DISTINCTION BETWEEN ARTICLES 151 AND 152897.
Chapter IV...898
EMPLOYMENT OF HOMEWORKERS...898
Article 153. Regulation of Industrial Homeworkers.......898
Article 154. Regulations of Secretary of Labor.......898
Article 155. Distribution of Homework....898
NOTES AND COMMENTS:
1. JOINT DISCUSSION OF ARTICLES 153, 154 AND 155898; 2. TWO KINDS OF EMPLOYEES
CONTEMPLATED IN ARTICLE 153898; 3. DISTINCTION BETWEEN ARTICLES 153 AND 154899; 4.
SIGNIFICANCE OF ARTICLE 155899; 5. DEPARTMENT ORDER NO. 5 [FEBRUARY 4, 1992]900; 6.
DUTIES OF EMPLOYER, CONTRACTOR OR SUBCONTRACTOR. ..900; 7. STANDARD OUTPUT RATES OR
MINIMUM PIECE RATES900; 8. PAYMENT FOR HOMEWORK901; 9. CONDITIONS FOR PAYMENT OF
WORK901; 10. DEDUCTIONS FOR LOST, DESTROYED, SOILED OR DAMAGED MATERIALS902; 11.
EMPLOYMENT OF WORKING CHILDREN (MINORS) AS HOMEWORKERS902; 12. PROHIBITIONS ON
CERTAIN KINDS OF HOMEWORK902; 13. REGULARITY OF EMPLOYMENT OF HOMEWORKERS902;
14. RIGHT TO SELF-ORGANIZATION OF HOMEWORKERS902; 15. ENFORCEMENT POWER903.
BOOK FOUR
HEALTH, SAFETY AND SOCIAL WELFARE BENEFITS
Title I.....905
MEDICAL, DENTAL AND OCCUPATIONAL SAFETY..905
Chapter I.......905
MEDICAL AND DENTAL SERVICES..905
NOTES AND COMMENTS:
1. INTRODUCTION TO BOOK IV OF THE LABOR CODE905; 2. COVERAGE OF CHAPTER I, TITLE I OF
BOOK IV OF THE LABOR CODE906.
Article 156. First-Aid Treatment......906
NOTES AND COMMENTS:
1. CONCEPT OF FIRST-AID TREATMENT906; 2. FIRST-AID MEDICINES, EQUIPMENT AND
FACILITIES906; 3. QUALIFICATIONS OF A FIRST-AIDER907; 4. TRAINING OF FIRST-AIDERS907.
Article 157. Emergency Medical and Dental Services....907
NOTES AND COMMENTS:
1. EMERGENCY MEDICAL AND DENTAL SERVICES908; 2. HAZARDOUS WORKPLACES909; 3. THE
PHYSICIAN, DENTIST OR NURSE MENTIONED IN ARTICLE 157 NEED NOT BE HIRED AS REGULAR
EMPLOYEES909; 4. AGENCY TASKED TO DEVELOP AND ENFORCE DENTAL STANDARDS910.
Article 158. When Emergency Hospital Not Required...910
NOTES AND COMMENTS:
1. EMERGENCY HOSPITAL OR DENTAL CLINIC; WHEN NOT REQUIRED910.
Article 159. Health Program.....910
NOTES AND COMMENTS:
1. COMPREHENSIVE OCCUPATIONAL HEALTH PROGRAM910.

xx

Article 160. Qualifications of Health Personnel.....911

NOTES AND COMMENTS:
1. TRAINING AND QUALIFICATIONS OF HEALTH PERSONNEL911; 2. OPPORTUNITY FOR TRAINING
AT EFFECTIVITY OF LABOR CODE911.
Article 161. Assistance of Employer.....912
NOTES AND COMMENTS:
1. DUTY OF EMPLOYER TO EXTEND ASSISTANCE912; 2. MEDICAL AND DENTAL RECORDS912.
Chapter II.....913
OCCUPATIONAL HEALTH AND SAFETY....913
NOTES AND COMMENTS:
1. COVERAGE OF CHAPTER II, TITLE I, BOOK IV OF THE LABOR CODE913; 2. GENERAL
OCCUPATIONAL HEALTH AND SAFETY STANDARDS913.
Article 162. Safety and Health Standards....913
NOTES AND COMMENTS:
1. OCCUPATIONAL SAFETY AND HEALTH (OSH), DEFINED914; 2. OCCUPATIONAL SAFETY AND
HEALTH STANDARDS914; 3. SIGNIFICANT AMENDMENTS TO OSH STANDARDS918; 4. RULE ON
WORK CONDITIONS NOT COVERED BY THE OSH STANDARDS920; 5. INSTITUTE OF OCCUPATIONAL
HEALTH AND SAFETY920; 6. OCCUPATIONAL SAFETY AND HEALTH CENTER (OSHC)920; 7. POLICY
GUIDELINES GOVERNING THE OCCUPATIONAL SAFETY AND HEALTH OF WORKERS IN THE CALL
CENTER INDUSTRY925; 8. GUIDELINES FOR THE IMPLEMENTATION OF POLICY AND PROGRAM ON
TUBERCULOSIS (TB) PREVENTION AND CONTROL IN THE WORKPLACE927; 9. GUIDELINES FOR THE
IMPLEMENTATION OF A DRUG-FREE WORKPLACE POLICIES AND PROGRAMS FOR THE PRIVATE
SECTOR930.
Article 163. Research.....938
NOTES AND COMMENTS:
1. RESEARCH938; 2. CONTINUING STUDIES AND SURVEYS938; 3. RESEARCH AND STUDIES
CONDUCTED BY THE OSHC938.
Article 164. Training Programs....940
NOTES AND COMMENTS:
1. MANDATORY NATURE OF HEALTH AND SAFETY REQUIREMENTS941; 2. TRAINING AND
ACCREDITATION OF PERSONNEL ON OCCUPATIONAL SAFETY AND HEALTH941; 3. DUTIES OF
EMPLOYERS..941; 4. DUTIES OF WORKERS942; 5. SAFETY OFFICER OR SAFETY MAN942; 6. SAFETY
COMMITTEES945; 7. PRACTITIONERS IN OCCUPATIONAL SAFETY AND HEALTH947; 8.
OCCUPATIONAL SAFETY AND HEALTH CONSULTANTS OR CONSULTING ORGANIZATIONS947; 9.
OCCUPATIONAL SAFETY AND HEALTH TRAINING ORGANIZATIONS948; 10. DUTIES OF BUILDERS,
CONTRACTORS OR OTHER PERSONS948; 11. ACCREDITATION OF QUALIFIED SAFETY AND HEALTH
PERSONNEL,
PRACTITIONERS,
CONSULTANTS
AND
CONSULTING
AND
TRAINING
ORGANIZATIONS948; 12. PROHIBITION ON THE PRACTICE OF OCCUPATIONAL SAFETY AND
HEALTH951; 13. AUDIT SYSTEM951.
Article 165. Administration of Safety and Health Laws.....951
NOTES AND COMMENTS:
1. ADMINISTRATION OF SAFETY AND HEALTH LAWS, REGULATIONS AND STANDARDS952; 2.
ENFORCEMENT OF SAFETY AND HEALTH LAWS, REGULATIONS AND STANDARDS953; 3.
COLLECTION OF REGULATORY FEES953; 4. REGISTRATION OF BUSINESS953.
Title II...955
EMPLOYEES COMPENSATION AND STATE INSURANCE FUND...955
Chapter I.......955
POLICY AND DEFINITIONS......955
Article 166. Policy......955
NOTES AND COMMENTS:
1. DECLARATION OF POLICY AND PURPOSE955; 2. CONSTITUTIONALITY OF THE LAW ON
EMPLOYEES COMPENSATION955; 3. HISTORICAL BACKGROUND956; 4. THE EMPLOYEES
COMPENSATION PROGRAM UNDER THE LABOR CODE, AS AMENDED958; 5. ADVANTAGES OF THE
EMPLOYEES COMPENSATION PROGRAM UNDER THE LABOR CODE OVER THOSE PROVIDED IN
PREVIOUS LAWS959; 6. COMPENSABLE CONTINGENCIES UNDER THE ECP959; 7. COMPENSATION
BENEFITS FOR WORK-RELATED INJURY, SICKNESS, DISABILITY OR DEATH960; 8. DISTINCTIONS
BETWEEN THE WORKMENS COMPENSATION ACT AND THE LABOR CODE ON PROOF OF
COMPENSABILITY962; 9. DOCTRINE OF PRESUMPTIVE COMPENSABILITY AND THEORY OF
AGGRAVATION; ABANDONED962; 10. PROOF OF COMPENSABILITY UNDER THE PRESENT
EMPLOYEES COMPENSATION SCHEME UNDER THE LABOR CODE, AS AMENDED963; 11. DESPITE
ABANDONMENT OF THE DOCTRINES, THE PRESENT LAW CONTINUES TO BE AN EMPLOYEES
COMPENSATION LAW OR A SOCIAL LEGISLATION965; 12. DESPITE ABANDONMENT OF THE
DOCTRINES, PRESUMPTION OF COMPENSABILITY STILL APPLIES IN CASES OF POLICEMEN AND
MEMBERS OF THE AFP966; 13. LAW APPLICABLE TO SPECIFIC WORKMENS COMPENSATION
CASES966.
Article 167. Definition of Terms...967
NOTES AND COMMENTS:
1. EMPLOYER970; 2. EMPLOYEE970; 3. TERMS RELATED TO CREDITED EARNINGS971.
Chapter II.....974

xxi

COVERAGE AND LIABILITY...974

Article 168. Compulsory Coverage...974
NOTES AND COMMENTS:
1. BACKGROUND ON THE STATE INSURANCE FUND [SIF]974; 2. SCOPE OF COVERAGE OF THE
ECP975; 3. NATURE OF COVERAGE976; 4. COMPULSORY COVERAGE OF PRIVATE SECTOR
EMPLOYERS AND EMPLOYEES UNDER THE SOCIAL SECURITY ACT OF 1997976; 5. COMPULSORY
COVERAGE OF PUBLIC SECTOR EMPLOYEES UNDER THE GSIS ACT OF 1997...977.
Article 169. Foreign Employment....977
NOTES AND COMMENTS:
1. COVERAGE OF FILIPINOS EMPLOYED ABROAD977; 2. MEDICAL SERVICES, APPLIANCES AND
SUPPLIES977; 3. RULE WHEN EMPLOYMENT CONTRACT STIPULATES THE APPLICATION OF
FOREIGN LAW977.
Article 170. Effective Date of Coverage...978
NOTES AND COMMENTS:
1. EFFECTIVITY DATE OF THE COMPULSORY COVERAGE OF EMPLOYERS AND EMPLOYEES UNDER
THE ECP978; 2. EFFECTIVITY DATE OF THE COMPULSORY COVERAGE OF PRIVATE SECTOR
EMPLOYERS AND EMPLOYEES UNDER THE SOCIAL SECURITY ACT OF 1997979; 3. EFFECTIVITY
DATE OF THE COMPULSORY COVERAGE OF PUBLIC SECTOR EMPLOYEES UNDER THE GSIS ACT OF
1997979.
Article 171. Registration........980
NOTES AND COMMENTS:
1. COMPULSORY REGISTRATION OF EMPLOYERS AND EMPLOYEES UNDER THE ECP980; 2.
GUIDELINES FOR PUBLIC SECTOR REGISTRATION WITH GSIS980; 3. GUIDELINES FOR PRIVATE
SECTOR REGISTRATION WITH SSS980; 4. GUIDELINES IN CASE AN EMPLOYEE HAS NOT YET BEEN
REGISTERED WITH THE SYSTEM (GSIS/SSS) AT THE TIME OF EMPLOYMENT...980; 5. PENALTY FOR
VIOLATION OF THE REGISTRATION REQUIREMENTS981.
Article 172. Limitation of Liability...981
NOTES AND COMMENTS:
1. OVERVIEW OF ARTICLE 172981; 2. EXISTENCE OF EMPLOYMENT RELATIONSHIP, ESSENTIAL IN
THE GRANT OF COMPENSATION BENEFITS UNDER THE LAW982; 3. GROUNDS FOR
COMPENSABILITY UNDER THE PRESENT LAW AND RULES982; 4. COMPENSABILITY OF INJURY
RESULTING IN DISABILITY OR DEATH983; 5. COMPENSABILITY OF DISEASE, SICKNESS OR ILLNESS
RESULTING IN DISABILITY OR DEATH1011; 6. PRE-EMPLOYMENT AND PERIODIC MEDICAL
EXAMINATION1035; 7. SICKNESS BENEFIT UNDER THE SOCIAL SECURITY ACT OF 19971037.
Article 173. Extent of liability.....1038
NOTES AND COMMENTS:
1. PRINCIPLE OF EXCLUSIVITY OF BENEFITS FROM THE SIF1039; 2. PREVAILING RULE IN CASE OF
SIMILAR BENEFITS GRANTED AND PROVIDED IN SEVERAL LAWS1040; 3. PRECURSOR OF ARTICLE
1731041; 4. CHOICE BETWEEN REMEDIES UNDER THE LABOR CODE (FORMERLY THE WORKMENS
COMPENSATION ACT) AND THE CIVIL CODE1042; 5. DOUBLE RECOVERY OF BENEFITS OF PRIVATE
SECTOR WORKERS UNDER THE LABOR CODE AND SSS LAW, ALLOWED...1047; 6. EXCLUSIVENESS OF
BENEFITS UNDER THE GSIS LAW; DOUBLE RECOVERY, NOT ALLOWED1049; 7. LIMITED
PORTABILITY SCHEME - TOTALIZING THE WORKERS CREDITABLE SERVICES OR CONTRIBUTIONS
TO BOTH SSS AND GSIS1049.
Article 174. Liability of Third Party/ies.....1052
NOTES AND COMMENTS:
1. THIRD PARTY; CONCEPT AND MEANING1053; 2. RULE ON RECOVERY IN CASE OF DISABILITY OR
DEATH CAUSED BY A THIRD PARTY1053; 3. LEGAL SUBROGATION1053; 4. RULE IN CASE OF
EXCESS RECOVERY1054; 5. RULE AGAINST DOUBLE RECOVERY BY EMPLOYEE1054.
Article 175. Deprivation of the Benefits.....1054
NOTES AND COMMENTS:
1. DEPRIVATION OF BENEFITS OF WORKERS1054; 2. EFFECT OF DEPRIVATION OF BENEFITS1054.
Chapter III.....1055
ADMINISTRATION....1055
Article 176. Employees Compensation Commission...1055
NOTES AND COMMENTS:
1. CREATION OF THE EMPLOYEES COMPENSATION COMMISSION (ECC)1055; 2. COMPOSITION OF
THE ECC1056; 3. THE GSIS1057; 4. THE SSS1057.
Article 177. Powers and Duties.......1058
NOTES AND COMMENTS:
1. POWERS AND DUTIES OF THE EMPLOYEES COMPENSATION COMMISSION [ECC]1059; 2. POWER
TO ASSESS AND FIX CONTRIBUTIONS BY EMPLOYERS1059; 3. POWER TO MAKE ACTUARIAL
STUDIES AND CALCULATIONS REGARDING THE GRANT OF BENEFITS1059; 4. RULE-MAKING
POWER1060; 5. POLICY-MAKING POWER1060; 6. POWER TO DETERMINE AND APPROVE
ADDITIONAL OCCUPATIONAL DISEASES AND WORK-RELATED ILLNESSES1062; 7. APPOINTING
POWER1062; 8. BUDGETARY POWER1062; 9. POWER TO ADMINISTER OATH AND ISSUE
COMPULSORY PROCESSES1062; 10. CORPORATE POWER1063; 11. APPELLATE POWER1063; 12.
POWER TO ENFORCE AND EXECUTE DECISIONS, ORDERS OR RESOLUTIONS1063; 13. OHER
PLENARY POWERS1063; 14. CONTEMPT POWER OF THE ECC1064; 15. POWERS AND DUTIES OF THE

xxii

SSC AND SSS UNDER THE SOCIAL SECURITY ACT OF 19971064; 16. POWERS AND FUNCTIONS OF THE
GSIS UNDER THE GSIS ACT OF 19971066.
Article 178. Management of Funds... ........1068
NOTES AND COMMENTS:
1. MANAGEMENT AND DISPOSITION OF REVENUES COLLECTED BY THE SYSTEM (GSIS/SSS)1069; 2.
DISBURSEMENT OF FUNDS; LIMITATION1069; 3. MANAGEMENT OF THE SSS FUNDS UNDER THE
SOCIAL SECURITY ACT OF 19971069; 4. MANAGEMENT OF THE SOCIAL INSURANCE FUND UNDER
THE GSIS ACT OF 19971070.
Article 179. Investment of Funds...1070
NOTES AND COMMENTS:
1. STATE INSURANCE FUND [SIF]1070; 2. DISPOSITION OF THE SIF1071; 3. SUBMISSION OF YEARLY
OPERATIONAL BUDGETS1071; 4. LATEST MONITORING OF THE SIF1071; 5. INVESTMENT OF SSS
FUNDS UNDER THE SOCIAL SECURITY ACT OF 19971071; 6. INVESTMENT OF THE FUNDS OF THE
GSIS UNDER THE GSIS ACT OF 19971074.
Article 180. Settlement of Claims...1075
NOTES AND COMMENTS:
1. JURISDICTION1075; 2. FILING OF EMPLOYEES COMPENSATION CLAIMS1076; 3. PROCEDURE IN
PURSUING THE CLAIMS WITH THE SYSTEM (GSIS/SSS)1077; 4. ADJUDICATION OF COMPENSATION
CLAIMS BY THE SYSTEM (GSIS/SSS)1078; 5. APPEAL TO THE ECC FROM THE AWARDS, DECISIONS,
ORDERS OR RESOLUTIONS OF THE SYSTEM (GSIS/SSS)1078; 6. THE SYSTEM (GSIS/SSS) AS PROPER
PARTY IN EMPLOYEES COMPENSATION CASES1081; 7. LIBERALITY IN THE INTERPRETATION OF
COMPENSATION LAWS AND RULES1081; 8. BURDEN OF PROOF IN EMPLOYEES COMPENSATION
CASES1082; 9. TEST OF COMPENSABILITY AND DEGREE OF PROOF1083; 10. QUITCLAIMS AND
RELEASES; LEGAL EFFECT...1088; 11. SETTLEMENT OF DISPUTES ARISING FROM THE SOCIAL
SECURITY ACT OF 19971089; 12. SETTLEMENT OF DISPUTES ARISING FROM THE GSIS ACT OF
19971089.
Article 181. Review......1089
NOTES AND COMMENTS:
1. ARTICLE 181 NO LONGER APPLIES1089; 2. JUDICIAL REVIEW OF DECISIONS, ORDERS OR
RESOLUTIONS OF ECC1090; 3. RULE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES;
EXCEPTIONS1092; 4. APPEALS AND COURT REVIEW OF CASES COGNIZABLE BY THE SSC UNDER
THE SOCIAL SECURITY ACT OF 19971093; 5. APPEALS IN CASES COGNIZABLE BY THE GSIS UNDER
THE GSIS ACT OF 19971093.
Article 182. Enforcement of Decisions......1093
NOTES AND COMMENTS:
1. WHEN DECISIONS, ORDERS OR RESOLUTIONS OF ECC BECOME FINAL AND EXECUTORY1094; 2.
AWARDS GRANTED BY ECC IN APPEALED CASES BECOME ENFORCEABLE AFTER FIFTEEN (15)
DAYS1094; 3. DECISIONS, ORDERS AND RESOLUTIONS IN OTHER CASES1094; 4. FAILURE TO
COMPLY WITH ECCS WRIT OF EXECUTION1094; 5. EXECUTION OF DECISIONS IN CASES
COGNIZABLE BY THE SSC UNDER THE SOCIAL SECURITY ACT OF 19971095; 6. EXECUTION OF
DECISIONS OF THE BOARD IN CASES COGNIZABLE BY THE GSIS UNDER THE GSIS ACT OF 19971095.
Chapter IV.....1096
CONTRIBUTIONS.......1096
Article 183. Employers Contributions......1096
NOTES AND COMMENTS:
1. NATURE OF CONTRIBUTIONS1096; 2. EMPLOYERS CONTRIBUTION TO THE SYSTEM1096; 3.
GOOD FAITH, NOT A DEFENSE IN NON-REMITTANCE OF CONTRIBUTIONS1098; 4. CONTRIBUTIONS
TO THE SSS UNDER THE SOCIAL SECURITY ACT OF 19971098; 5. CONTRIBUTIONS TO THE GSIS
UNDER THE GSIS ACT OF 19971100.
Article 184. Government Guarantee......1101
NOTES AND COMMENTS:
1. GUARANTEE OF THE GOVERNMENT UNDER ARTICLE 1841101; 2. RATIONALE FOR THE
PROVISION1101; 3. PROMPT PAYMENT OF CLAIMS.1102; 4. GOVERNMENT GUARANTEE UNDER
THE SOCIAL SECURITY ACT OF 19971102; 5. GOVERNMENT GUARANTEE UNDER THE GSIS ACT OF
19971102.
Chapter V...1103
MEDICAL BENEFITS....1103
Article 185. Medical Services......1103
NOTES AND COMMENTS:
1. CONDITIONS FOR ENTITLEMENT TO MEDICAL SERVICES, APPLIANCES AND SUPPLIES...1103; 2.
PERIOD OF ENTITLEMENT1103; 3. EXTENT OF SERVICES1103; 4. LOSS OF WAGES OR EARNING
CAPACITY NOT REQUIRED1104.
Article 186. Liability....1104
NOTES AND COMMENTS:
1. AUTHORITY TO CHANGE PHYSICIAN, HOSPITAL OR REHABILITATION FACILITY1104; 2.
UNAUTHORIZED CHANGES IN MEDICAL SERVICES, APPLIANCES, SUPPLIES, HOSPITALS AND
PHYSICIANS1104.
Article 187. Attending Physician1104

xxiii

NOTES AND COMMENTS:

1. DUTIES OF ATTENDING PHYSICIAN1105; 2. MEDICAL REPORTS1105; 3. NATURE OF MEDICAL
INFORMATION1105; 4. ACCREDITATION OF PHYSICIANS; MINIMUM REQUIREMENTS1105; 5.
CONDITIONS ON ACCREDITED PHYSICIANS1105; 6. MEDICAL CERTIFICATION; EVIDENTIARY AND
PROBATIVE VALUE THEREOF1105.
Article 188. Refusal of Examination or Treatment......1107
NOTES AND COMMENTS:
1. UNREASONABLE REFUSAL BY EMPLOYEE OF MEDICAL EXAMINATION OR TREATMENT1107; 2.
EFFECT OF UNREASONABLE REFUSAL BY EMPLOYEE1107.
Article 189. Fees and Other Charges.....1107
NOTES AND COMMENTS:
1. STANDARD FEES AND CHARGES SET UNDER ARTICLE 1891108; 2. MEDICAL BENEFITS IN ANNEX
C OF THE AMENDED RULES ON EMPLOYEES COMPENSATION1108; 3. ACCREDITATION OF
HOSPITALS1110; 4. UTILIZATION REVIEW1110; 5. PAYMENT OF SERVICES OF ACCREDITED AND
NON-ACCREDITED HOSPITALS AND PHYSICIANS1111; 6. EMERGENCY SERVICES1111; 7. REFERRAL
BY EMPLOYER OF SICK OR INJURED EMPLOYEE1111; 8. DIS-ACCREDITATION OF HOSPITAL OR
PHYSICIAN FOR VIOLATION OF CONDITIONS AND REQUIREMENTS1111.
Article 190. Rehabilitation Services.......1112
NOTES AND COMMENTS:
1. REHABILITATION, DEFINED1112; 2. REHABILITEE, DEFINED1112; 3. COVERAGE, NATURE AND
EFFECTIVITY1112; 4. CONDITIONS TO ENTITLEMENT TO REHABILITATION SERVICES1112; 5.
PERIOD OF ENTITLEMENT TO REHABILITATION SERVICES1113; 6. EXTENT OF REHABILITATION
SERVICES1113; 7. WORKERS REHABILITATION CENTER COMPLEX1113; 8. OCCUPATIONAL
SAFETY AND HEALTH CENTER (OSHC)1113; 9. ACCREDITATION OF REHABILITATION
FACILITIES1114; 10. CONDITIONS ON ACCREDITED HOSPITALS OR REHABILITATION
FACILITIES1114; 11. LIABILITY LIMITATIONS1114; 12. SUSPENSION OR TERMINATION OF THE
REHABILITEE1115; 13. APPEAL FROM THE DECISION SUSPENDING OR TERMINATING THE
REHABILITEE...1115; 14. PLACEMENT OF THE REHABILITEE1115; 15. PARTICIPATION OF THE
SYSTEM (GSIS OR SSS)1115; 16. REPORTS TO THE GOVERNING BOARD (ECC)1115.
Chapter VI.....1116
DISABILITY BENEFITS....1116
NOTES AND COMMENTS:
1. THREE KINDS OF DISABILITY UNDER THE LABOR CODE1116; 2. DISABILITY, MEANING1116; 3.
REQUISITES FOR ENTITLEMENT TO DISABILITY OR SICKNESS BENEFITS1116; 4. COMPENSATION
FOR DISABILITIES NOT MUTUALLY EXCLUSIVE1117.
Article 191. Temporary Total Disability....1117
NOTES AND COMMENTS:
1. TOTAL DISABILITY, WHEN TEMPORARY UNDER ARTICLE 1911117; 2. CONDITIONS TO
ENTITLEMENT IN CASE OF TEMPORARY TOTAL DISABILITY1117; 3. PERIOD OF ENTITLEMENT IN
CASE OF TEMPORARY TOTAL DISABILITY1118; 4. AMOUNT OF INCOME BENEFIT IN CASE OF
TEMPORARY TOTAL DISABILITY (TTD)...1118; 5. EFFECT OF GRANT OF TTD INCOME BENEFIT ON
LEAVE CREDITS1119; 6. TEMPORARY TOTAL DISABILITY UNDER THE GSIS ACT OF 19971119.
Article 192. Permanent Total Disability....1119
NOTES AND COMMENTS:
1. DISABILITY, WHEN TOTAL AND PERMANENT UNDER ARTICLE 1921120; 2. LITMUS TEST AND
DISTINCTION BETWEEN PERMANENT TOTAL DISABILITY AND PERMANENT PARTIAL
DISABILITY1122; 3. RETIREMENT DUE TO INJURY OR SICKNESS AMOUNTS TO TOTAL
DISABILITY1123; 4. CONDITIONS TO ENTITLEMENT IN THE CASE OF PERMANENT TOTAL
DISABILITY...1124; 5. PERIOD OF ENTITLEMENT IN THE CASE OF PERMANENT TOTAL
DISABILITY1125; 6. INCOME BENEFIT IN THE CASE OF PERMANENT TOTAL DISABILITY1125; 7.
AMOUNT OF BENEFIT FOR DEPENDENT CHILDREN1126; 8. PERMANENT TOTAL DISABILITY UNDER
THE SOCIAL SECURITY ACT OF 19971127; 9. PERMANENT TOTAL DISABILITY UNDER THE GSIS ACT
OF 19971127.
Article 193. Permanent Partial Disability......1128
NOTES AND COMMENTS:
1. DISABILITY, WHEN PARTIAL AND PERMANENT1129; 2. CONDITIONS TO ENTITLEMENT1130; 3.
INCOME BENEFIT AND PERIOD OF ENTITLEMENT IN CASE OF PERMANENT PARTIAL
DISABILITY...1130; 4. PERMANENT PARTIAL DISABILITY UNDER THE SOCIAL SECURITY ACT OF
19971132; 5. PERMANENT PARTIAL DISABILITY UNDER THE GSIS ACT OF 1997...1133.
Chapter VII........1134
DEATH BENEFITS......1134
Article 194. Death....1134
NOTES AND COMMENTS:
1. DEATH; MEANING1134; 2. COMPENSABLE DEATH1134; 3. PROOF REQUIRED IN ORDER FOR
DEATH TO BE COMPENSABLE1134; 4. INCOME BENEFIT IN CASE OF DEATH1135; 5. CONDITIONS
TO ENTITLEMENT1135; 6. PERIOD OF ENTITLEMENT TO DEATH BENEFIT1136; 7. AMOUNT OF
DEATH BENEFIT1136; 8. PRESUMPTIVE DEATH1137; 9. DISTRIBUTION OF BENEFITS UPON THE
DEATH OF A PENSIONER1137; 10. DEATH BENEFITS, NOT PART OF THE ESTATE OF THE
DECEASED1137; 11. DEATH BENEFITS UNDER THE SOCIAL SECURITY ACT OF 19971138; 12. DEATH

TABLE OF CONTENTS

xxiv

BENEFITS UNDER THE GSIS ACT OF 19971138; 13. FUNERAL BENEFIT UNDER THE LABOR
CODE1139; 14. FUNERAL BENEFIT UNDER THE SOCIAL SECURITY ACT OF 19971140; 15. FUNERAL
BENEFIT UNDER THE GSIS ACT OF 19971140.
Chapter VIII......1141
PROVISIONS COMMON TO INCOME BENEFITS....1141
Article 195. Relationship and Dependency...1141
NOTES AND COMMENTS:
1. DEPENDENCY; MEANING1141; 2. TEST OF DEPENDENCY1141; 3. CLASSIFICATION OF
DEPENDENCY1141;
4.
SPECIFIC
DEPENDENTS
UNDER
THE
LABOR
CODE...1142;
5.
BENEFICIARIES1145; 6. WHEN TO DETERMINE BENEFICIARIES1145; 7. RULE ON PRIORITY OF
BENEFICIARIES1146; 8. BENEFITS PAYABLE1146; 9. MONTHLY INCOME BENEFIT; HOW
DISTRIBUTED1146; 10. EVIDENCE TO PROVE RELATIONSHIP AND DEPENDENCY1146; 11.
DEPENDENCY RULE UNDER THE SSS LAW1146; 12. SURVIVORSHIP BENEFITS UNDER THE GSIS ACT
OF 19971152.
Article 196. Delinquent Contributions...1153
NOTES AND COMMENTS:
1. LIABILITY OF A DELINQUENT EMPLOYER1153; 2. OBLIGATION OF THE SYSTEM (GSIS/SSS)TO PAY
IN ADVANCE ALL BENEFITS TO THE AFFECTED EMPLOYEE OR HIS DEPENDENTS AND RIGHT TO
PROCEED AGAINST ERRING DELINQUENT EMPLOYER1154.
Article 197. Second Injuries...1154
NOTES AND COMMENTS:
1. APPLICATION OF ARTICLE 1971154; 2. LIABILITY OF STATE INSURANCE FUND FOR THE SECOND
INJURY1154; 3. CONVERSION OF PERMANENT PARTIAL DISABILITY RATING TO PERMANENT
TOTAL DISABILITY1154.
Article 198. Assignment of Benefits...1156
NOTES AND COMMENTS:
1. PRINCIPLE OF NON-ASSIGNABILITY OF BENEFITS1156; 2. EXCEPTION1156; 3. NONTANSFERABILITY OF BENEFITS AND EXEMPTION FROM TAX, LEGAL PROCESS AND LIEN OF
BENEFITS PROVIDED UNDER THE SOCIAL SECURITY ACT OF 19971156; 4. EXEMPTION FROM TAX,
LEGAL PROCESS AND LIEN OF BENEFITS PROVIDED UNDER THE GSIS ACT OF 19971157.
Article 199. Earned Benefits...1158
NOTES AND COMMENTS:
1. ENTITLEMENT TO INCOME BENEFITS DURING PERIOD OF DISABILITY1158; 2. ENTITLEMENT TO
WAGES AND OTHER EARNED BENEFITS PROVIDED UNDER THE CBA, EMPLOYMENT AGREEMENT OR
VOLUNTARY EMPLOYER POLICY OR PRACTICE1158.
Article 200. Safety Devices......1158
NOTES AND COMMENTS:
1. PENALTY FOR FAILURE TO INSTALL AND MAINTAIN SAFETY DEVICES1158; 2. CAUSE OF
SICKNESS, INJURY OR DEATH; DUTY TO ASCERTAIN1159.
Article 201. Prescriptive Period......1159
NOTES AND COMMENTS:
1. PRESCRIPTIVE PERIOD OF EMPLOYEES COMPENSATION CLAIMS UNDER ARTICLE 2011159; 2.
RULES
ON
THE
RECKONING
OF
THE
PRESCRIPTIVE
PERIOD
IN
COMPENSABLE
CONTINGENCIES1160; 3. WHEN CLAIMS FILED BEYOND THE 3-YEAR PRESCRIPTIVE PERIOD MAY
STILL BE ALLOWED1161; 4. PRESCRIPTIVE PERIOD OF WORKMENS COMPENSATION CLAIMS
PRIOR TO EFFECTIVITY OF THE LABOR CODE1165; 5. PRESCRIPTIVE PERIOD OF CLAIMS BY
MINORS AND NON COMPOS MENTIS; WHEN RECKONED1165; 6. PRESCRIPTIVE PERIOD PROVIDED IN
ARTICLE 201 DISTINGUISHED FROM THOSE FOUND IN ARTICLES 290 AND 291 OF THE LABOR
CODE1165; 7. PRESCRIPTIVE PERIOD PROVIDED UNDER THE SOCIAL SECURITY ACT OF 19971166;
8. PRESCRIPTIVE PERIOD PROVIDED UNDER THE GSIS ACT OF 19971167.
Article 202. Erroneous Payment....1167
NOTES AND COMMENTS:
1. EFFECT OF ERRONEOUS PAYMENT1168; 2. HOW DOUBT IS RESOLVED IN CASE OF RIVAL
CLAIMANTS1168.
Article 203. Prohibition...1168
NOTES AND COMMENTS:
1. CATEGORICAL PROHIBITION AGAINST CHARGING FOR SERVICES112. PROHIBITION AGAINST
RETENTION OR DEDUCTION FROM COMPENSATION BENEFITS1168; 3. 10% ATTORNEYS FEES;
WHEN ALLOWED1168; 4. PENALTY
FOR
TABLE
OFVIOLATION
CONTENTS OF ARTICLE 2031169; 5. PROHIBITION ON FEES
OF AGENTS, ATTORNEYS OR OTHER PERSONS UNDER THE SOCIAL SECURITY ACT OF 19971169.
Article 204. Exemption From Levy, Tax, Etc....1170
NOTES AND COMMENTS:
1. EXEMPTION OF STATE INSURANCE FUND FROM ANY GOVERNMENT IMPOSITIONS OR
CHARGES1170; 2. EFFECT OF FUTURE LAW ON THE EXEMPTION1170.
Chapter IX.....1171
RECORDS, REPORTS AND PENAL PROVISIONS....1171
Article 205. Record of Death or Disability....1171

xxv

NOTES AND COMMENTS:

1. EMPLOYERS LOGBOOK ON SICKNESS, INJURY, DISABILITY OR DEATH1171; 2. EFFECT OF
FRAUDULENT CLAIMS INVOLVING THE EMPLOYER1172; 3. VISITORIAL POWER OF THE SYSTEM;
INSPECTION OF THE LOGBOOK1172; 4. NOTICE BY EMPLOYER TO THE SYSTEM1172; 5. PENALTY
FOR VIOLATION OF ARTICLE 2051172; 6. EMPLOYMENT RECORDS AND REPORTS UNDER THE
SOCIAL SECURITY ACT OF 19971173; 7. EMPLOYMENT RECORDS AND REPORTS UNDER THE GSIS
ACT OF 19971174.
Article 206. Notice of Sickness, Injury or Death.......1175
NOTES AND COMMENTS:
1. REQUIRED NOTICE TO THE EMPLOYER BY THE EMPLOYEE OR HIS DEPENDENTS OF HIS SICKNESS,
INJURY OR DEATH1175; 2. WHEN NOTICE NOT NECESSARY1175.
Article 207. Penal Provisions......1176
NOTES AND COMMENTS:
1. LAWS REFERRED TO IN ARTICLE 207 [A]1177; 2. APPLICABILITY OF ARTICLE 207 [A] IN RELATION
TO R.A. NO. 1161 AND C. A. NO. 1861177; 3. PENAL PROVISIONS IN THE SSS LAW REFERRED TO IN
ARTICLE 207 [A]1177; 4. PENAL PROVISIONS IN THE GSIS LAW REFERRED TO IN ARTICLE 207
[A]1178; 5. PENALTY FOR FRAUD, COLLUSION, FALSIFICATION, MISREPRESENTATION OR OTHER
ANOMALIES1180; 6. PENALTY IN CASE THE OFFENDER IS A RECIDIVIST OR AN EMPLOYEE OF THE
ECC, GSIS OR SSS OR A LAWYER, PHYSICIAN OR OTHER PROFESSIONALS1180.
Article 208. Applicability.....1180
NOTES AND COMMENTS:
1. APPLICATION OF THE EMPLOYEES COMPENSATION PROVISIONS OF THE LABOR CODE...1180; 2.
SIGNIFICANCE OF JANUARY 1, 19751181; 3. GOVERNING LAW1181.
Article 208-A. Repeal......1182
NOTES AND COMMENTS:
1. ARTICLE 208-A INSERTED BY P.D. NO. 13691182; 2. REPEAL OF INCONSISTENT AND CONTRARY
LAWS1182; 3. LAWS REPEALED UNDER ARTICLE 208-A1183; 4. PROVISIONS OF THE GSIS LAW
REFERRED TO IN ARTICLE 208-A1183.
Title III...1185
MEDICARE.......1185
Article 209. Medical Care...1185
NOTES AND COMMENTS:
1. REPEAL OF R.A. NO. 61111185; 2. NATIONAL HEALTH INSURANCE ACT OF 19951185; 3. THE
PHILIPPINE HEALTH INSURANCE CORPORATION (PHIC)1185; 4. CONTINUATION OF THE MEDICARE
PROGRAM UNDER P.D. NO. 15191188; 5. TRANSFER OF MEDICARE FUNDS AND FUNCTIONS FROM
OWWA TO PHIC1189; 6. THE NATIONAL HEALTH INSURANCE FUND1189; 7. THE NATIONAL
HEALTH INSURANCE PROGRAM UNDER R.A. NO. 78751193; 8. COVERAGE, MEMBERSHIP AND
CONTRIBUTIONS1195; 9. GENERAL PROVISIONS CONCERNING ALL MEMBERS1200; 10. SPECIFIC
PROVISIONS CONCERNING EMPLOYED MEMBERS AND EMPLOYERS1203; 11. SPECIFIC PROVISIONS
CONCERNING INDIGENT MEMBERS1206; 12. SPECIFIC PROVISIONS CONCERNING INDIVIDUALLY
PAYING MEMBERS1208; 13. SPECIFIC PROVISION CONCERNING RETIREE-MEMBERS1209; 14.
ENTITLEMENT TO BENEFITS1209; 15. PAYMENT OF CLAIMS1212; 16. ACCREDITATION AND
QUALITY ASSURANCE OF THE NHIP1216; 17. RULES OF PROCEDURE OF THE CORPORATION1232;
18. OFFENSES AND PENALTIES1241; 19. OFFENSES OF INSTITUTIONAL HEALTH CARE
PROVIDERS1242; 20. OFFENSES OF HEALTH CARE PROFESSIONALS1244; 21. OFFENSES OF
MEMBERS1245; 22. OFFENSES OF OFFICERS AND EMPLOYEES OF THE CORPORATION1245; 23.
OFFENSES OF EMPLOYERS1246; 24. PROSECUTION OF CRIMINAL OFFENSES 1247; 25. GRIEVANCE
AGAINST PROGRAM IMPLEMENTORS1248; 26. ADMINISTRATIVE PROTESTS RELATED TO
PROCESSING AND PAYMENT OF CLAIMS1252.
Title IV...1254
ADULT EDUCATION.....1254
Article 210. Adult Education......1254
NOTES AND COMMENTS:
1. ADULT EDUCATION PROGRAM1254; 2. WHO INITIATES THE ESTABLISHMENT OF THE
PROGRAM1254.

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